Here’s what you need to know about filing late tax returns.
What is Late ITR?
Income tax return filed after due date under section 139(4) of the Income Tax Act, 1961 is called delayed ITR.
What is the last date for filing delayed ITR?
As per the amendment announced in Budget 2021, the deadline for filing delayed ITR has been reduced by three months. Now, a belated return can be filed at any time before three months from the end of the relevant assessment year or before the completion of assessment, whichever is earlier.
Till FY 2019-20 (AY 2020-21), a person can file delayed ITR till 31st March of the assessment year. However, with effect from FY 2020-21 (AY 2021-22), delayed ITR can be filed till December 31 of the assessment year. Hence, for the FY 2021-22, an individual taxpayer will now have 5 months (December 31, 2022) after the expiry of the due date (July 31, 2022) for filing ITR instead of 8 months (March 31, 2023). see you.
What is the penalty amount for delayed ITR filing?
Till the financial year 2019-20 (AY 2020-21), there was a two-tier structure. If the delayed ITR was filed after the expiry of the deadline (July 31) but on or before December 31, a late fee of Rs 5,000 was applicable. If the ITR was filed between January and March, a late filing fee of Rs 10,000 was levied. A consequential amendment was made in section 234F due to reduction in the time limit for filing delayed ITR.
Hence, now as per the extant rules, a person has to pay a late filing fee of Rs 5,000 for delayed ITR filing. For small taxpayers whose total income does not exceed Rs 5 lakh, the late filing fee will not exceed Rs 1,000.
What are the benefits lost while filing delayed ITR?
Apart from paying late filing fees up to Rs 5,000, a person has to forego other benefits as well. Naveen Wadhwa, DGM Chartered Accountant, Taxman.com says, “If a person misses the due date for filing ITR and subsequently files ITR late, he will not be eligible to carry forward the loss (top Excluding loss under – Income from house property) Loss under the following income heads cannot be carried forward, if late ITR is filed:
i) income from business and profession including speculative business,
ii) Income from capital gains,
iii) Income from other sources.”
In addition, if no tax has been paid at the time of filing ITR, penal interest will also be levied. “If self-assessment tax is due, penal interest under section 234A will be levied,” says Wadhwa.
Can the late ITR be revised later if a mistake is detected?
After filing of delayed ITR, if any mistake is found, an individual taxpayer can revise the delayed ITR. However, note that the last date for filing delayed ITR and revised ITR is the same, i.e. 31st December of the respective assessment year.
So, if you file your belated ITR for FY 2021-22 (AY 2022-23) on December 31, 2022, you may not get the opportunity to file the amended return as the deadline for filing it is also 31. Expires on December. 2022.
What are the things to be kept in mind while filing ITR late?
If you are filing belated ITR, you need to fill and file it using the applicable ITR form notified for the assessment year. The assessment year relevant to a financial year is the immediately succeeding financial year.
Thus, while filing delayed ITR for FY 2021-22, the relevant assessment year is 2022-23. An individual taxpayer should use the notified ITR form for the year 2022-23 for filing delayed ITR.