ITR Deadline Missed? Know late fees, rules, and penalty for late filing

The last date to file the income tax return for the FY 2022-23 has lapsed. Individuals can still file an ITR even after the ITR deadline, which is known as a belated ITR

The last date to file an income tax return (ITR) for the FY 2022-23 was July 31, 2023, which has lapsed. Individuals who missed the ITR deadline can still file the ITRs, which will be termed as belated ITRs.

The last date to file the belated ITRs is December 31, 2023, for the current financial year.

This year, the I-T department has achieved a milestone as more than 6.50 crore income-tax returns (ITR) were filed until July 31. Still, many people missed the deadline to file the return.

What is Belated ITR?

Belated ITR helps you file your income tax return even after the due date. However, the belated ITR comes with its limitations. The failure to file the ITR on the due date leads to a loss of carry forward of business and capital losses for future years. You can still carry forward the unabsorbed depreciation and losses under the heading of "income from house property."

In case you filed your ITR on time, you can carry forward such losses for 8 years. You can also set off against future capital gains to reduce your taxable income and thereby, income tax payable.

What is the fine and penalty for filing ITR after the due date?

Taxpayers who missed filing the ITR must file their belated ITR three months before the end of the relevant assessment year or before the end of December 31 with late fees of Rs 5000. 

If the total income of a taxpayer is less than Rs 5,00,000 then the penalty imposed will be Rs 1000, and there would be no late fees, whose income is less than the exemption limit.

Beyond the late fee, belated ITR also invites penalty interest that is charged at the rate of 1 per cent per month on the taxable amount, which will be applied on taxable income deducting TDS (tax deducted at source), TCS (tax collected at source), advance tax and other reliefs/ tax credits available under the law.

At the time of computing penalty interest, even a single-day delay will impose interest for a month.

Failure to file income tax can also lead to imprisonment. In case, the tax evaded or payable exceeds Rs 25 lakh, it will result in imprisonment, which ranges between 6 months to 7 years along with a fine.

Disadvantages of filing belated ITR

There are several disadvantages as well for filing belated ITR beyond fines and penalties, like one will receive interest on excess tax deduction only after filing the return on time. The delay in filing ITR may result in a long wait and even a loss of receipt of the tax refund.

A taxpayer needs to e-verify the filing, a taxpayer can e-verify himself within 30 days without penalty. Failure to e-verify your return could result in rejection of the e-filing.