The income tax return filing season is currently underway, with the due date set for July 31, 2024. Timely filing of tax returns is crucial for every taxpayer, and doing so before the deadline offers significant benefits.
Consequences of Failing to File Income Tax Returns on Time
If taxpayers fail to submit their income tax returns by the due date, they may face several consequences. These rules also apply if a belated return is filed by December 31, 2024, for FY 2023-24.
- Penal Interest under Section 234A
- Taxpayers must pay interest at 1% per month or part of a month starting the day after the ITR filing due date, July 31st.
- Late Fees under Section 234F
- Taxpayers are liable for late filing fees from the assessment year 2018-19 onwards. The fees are Rs. 5,000 for incomes exceeding Rs. 5 lakhs and Rs. 1,000 for incomes below Rs. 5 lakhs.
Also read: Budget 2024: 7 Expected Income Tax Benefits from Finance Minister Nirmala Sitharaman on July 23
- Carry Forward of Loss
- Losses cannot be carried forward if the return of loss is submitted after the due date.
- Non-availability of Income Tax Deductions
- Deductions under certain sections are not available if the return is filed late. These include:
- Up to the assessment year 2017-18: Sections 10A, 10B, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID, and 80-IE.
- From the assessment year 2018-19: Sections 10A, 10B, 80-IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, 80-IC, 80-ID, 80-IE, 80-JJA, 80-JJAA, 80LA, 80P, 80PA, 80QQB, and 80RRB.
- Tax Evasion
- Non-filing of an ITR can be considered tax evasion, risking imprisonment from 6 months to 7 years.
Filing your income tax returns on time is essential to avoid these penalties and ensure compliance with tax regulations.