Last date for filing income tax return (ITR) for the financial year 2021-22 (AY 2022-23) is July 31, 2022. This time limit is applicable for individuals whose accounts are not required to be audited. If you do not file your ITR by the deadline, you will not only have to pay late filing charges but there are other disadvantages as well.

As per the current income tax laws, a late fee of up to Rs.5,000 is levied if a delayed ITR is filed. However, the late filing fee for small taxpayers is Rs 1,000 if the taxable income does not exceed Rs 5 lakh. Late filing fee is levied under section 234F of the Income Tax Act, 1961. Note that this late fee must be paid before filing the delayed ITR.

Yashesh Ashar, Partner, Bhuta Shah & Co LLP – a Mumbai based Chartered Accountant firm, explains the gains that have been lost for no reason filing ITR before the time limit expires.

1) If a person files income tax return after the expiry of the time limit, he will not be able to carry forward the loss under the following heads:

a) Income from other sources

B) Income from capital gains

c) Income from business and profession including speculative business

However, a person is allowed to carry forward the loss under the head ‘Income from house property’.

2) If income tax refund is due, then tax refund will be payable only when ITR is filed and verified.

3) An individual is eligible for interest on income tax refund @ 0.5% per month. However, if a person delays ITR for claiming income tax refund, no interest is payable on income tax refund.

4) A person is liable to pay penal interest if any tax is outstanding at the time of filing of delayed ITR. Depending on the type of tax payable, penal interest is levied under sections 234A, 234B and 234C.

Penal interest under section 234A is levied if a person fails to deposit self-assessment tax before July 31. Similarly, penal interest under section 234B is levied if a person fails to deposit 90% of the advance tax before 31st March of the financial year. Penal interest under section 234C is levied if a person has not paid advance tax during the previous financial year.

Penal interest at the rate of 1% per month is levied on the outstanding tax amount under all the three sections.

Other things to keep in mind

Individual taxpayers should note that there is also a time limit for filing delayed ITR. If a person misses the date of filing ITR for FY 2021-22, i.e. July 31, 2022, then he/she will have to file delayed ITR for FY 2021-22 on or before December 31, 2022.

If a person misses the deadline of December 31, 2022, he will not be able to file ITR until the Income Tax Department sends him a notice to file it.