However, for the financial year 2020-21 (AY 2021-22) i.e. from the previous year, the amount of penalty has been halved, i.e. a person filing late ITR will have to pay a maximum penalty of Rs 5,000. Also, if your income is below the taxable limit, you will also not have to pay the penalty amount for filing your ITR after the deadline, subject to certain exceptions. This is the reason why the fine this year is half as compared to last year.
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These taxpayers will not have to pay penalty for filing ITR after the deadline
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In Budget 2021, the government reduced the maximum time taken by an individual (whose accounts are not required to be audited) to file ITR by three months. Due to the reduction in the time limit for filing ITR, a consequent amendment was made in Section 234F of the Income Tax Act, 1961, under which a penal amount is levied for delayed ITR filing. This amount was earlier reduced from Rs 10,000 to a maximum of Rs 5,000.
Earlier, an individual was allowed to file delayed ITR till the end of the financial year, i.e. on March 31, by paying a maximum penalty of Rs 10,000.
From FY 2020-21 (AY2021-22), the normal deadline for filing delayed ITR is December 31 (unless extended by the government). Accordingly, for FY 2021-22 (AY2022-23), i.e. for this year, the deadline for filing delayed ITR is December 31, 2022. A person filing ITR late by the deadline of December 31, 2022 will have to pay the maximum penalty. 5,000 Rs.
Till FY 2019-20 (AY 2020-21), there was a two-tier penalty structure for missing ITR filing deadline. If the belated ITR was filed after the expiry of the deadline and on or before December 31, the individual was required to pay a late filing fee of Rs 5,000. If the ITR was filed between January 1 and March 31, a late filing fee of Rs 10,000 was levied.
Kapil Rana, founder and president, Hostbook, a fintech startup offering ITR filing services, says, “As per section 234F, till FY 2019-20, if the taxpayer fails to file ITR on or before the due date, then he is liable to pay a fee of Rs 5,000 if the tax return was furnished on or before 31st December of the relevant assessment year, otherwise, it will be Rs 10,000 if the tax return is furnished after 31st December, but From the financial year 2020-21, the law has been changed. A maximum late fee of Rs 5000 will be payable on submission of returns after the expiry of the due date.”
However, there has been no change in the penalty amount for small taxpayers who miss the ITR filing deadline. If you are a small taxpayer whose total income does not exceed Rs 5 lakh during a financial year, the maximum charge is Rs 1,000 if the ITR is filed at any time after the deadline, i.e. December 31, 2022.