Missed July 31 deadline for filing ITR? File belated return by December 31

But you will have to pay a late fee, interest, and won't be able to carry forward business and capital losses

The deadline for filing the income-tax return (ITR) for assessment year 2023–24 was July 31, 2023. However, for those who missed the deadline, there is still a chance to make amends. The Income-Tax (I-T) Act provides an opportunity to file what is called a belated ITR.

Says Pallav Pradyumn Narang, partner, CNK, “If an assessee who is required to file an ITR under Section 139 of the I-T Act, 1961, misses the deadline, she can file a belated return by December 31, 2023.”

Stay compliant

Filing a belated return enables you to stay compliant with tax regulations and avoid legal complications.

An ITR is required to be filed in order to show the taxpayer’s income and sources of income to the government as proof of being a legitimate taxpayer. Says Sandeep Bajaj, advocate, Supreme Court of India, “A person’s citizenship as well as business in India is dependent on the taxes and ITR filed by them, as it allows them to continue their citizenship or business within India.”

Ankit Rajgarhia, principal associate, Karanjawala & Company, Advocates, points out that even if you missed the original deadline, you can still claim a tax refund if you are eligible for one, by filing a belated return.

Financial consequences

While belated returns come as a saving grace, they carry a cost. Says Ankit Jain, partner, Ved Jain & Associates, “If the income exceeds the basic exemption limit and the ITR is filed after the due date but on or before December 31, 2023, a late filing fee of Rs. 5,000 is levied. However, for taxpayers whose income does not exceed Rs. 5 lakh, the late filing fee doesn’t exceed Rs. 1,000.”

Soayib Qureshi, partner, PSL Advocates & Solicitors, warns that the assessee will have to pay an interest cost under Section 234A. Interest under Section 234A is charged at the rate of 1 per cent per month or part of a month on the unpaid tax amount.

Narang adds that besides interest under Section 234A, interest under 234B may also continue to apply. “This ultimately increases the assessee’s overall tax liability,” he says. Section 234B pertains to delays in advance tax payments or incomplete payments.

Those who file a belated return will also not be eligible for deductions under Part C of Chapter VI-A.

The taxpayer also pays a price in terms of carrying forward losses. Says Maneet Pal Singh, partner, I.P. Pasricha & Co., “While the assessee can carry forward losses arising from house property, she can’t carry forward business and capital losses.”

Don’t leave it for the last minute

File a belated return right away and do not make the mistake of leaving this task until the deadline of December 31, 2023.

Ensure all the information you provide in the belated return is accurate to avoid any issues later. Says Rajgarhia, “Keep all relevant documents ready to support the information in your return as the tax department can ask for verification.” If you have any outstanding taxes, pay them along with any applicable interest before filing the belated return.

If, after filing your belated ITR, you realise that you made an error, you can revise it. You can revise your tax return online until the last day (i.e., December 31, 2023, on or before midnight).

While furnishing a belated ITR, select the option “Filed under Section 139(4) — after the due date”. Finally, verify your ITR within 30 days of filing it.

Singh suggests seeking professional advice to file a belated ITR. “Be extra cautious while filing all the particulars relating to losses and claiming credit for tax deducted at source, tax collected at source and advance tax paid,” he adds.

The I-T Department offers a customer support service called a co-browsing facility. Here, tax agents help taxpayers file their ITRs. Says Bajaj, “In the co-browsing facility, an agent connects with the taxpayer on a chat tool. Those taxpayers who require expert help in filing an ITR can avail of it.”

If you don't qualify to file an ITR and missed the return filing deadline, you can do so without any worry. Says Qureshi, “No penalty will be imposed if the income did not require a mandatory filing of return under Section 139 (1), even though the return is filed after the expiration of the assessment year.”

How to file a belated return?

• The process of filing a belated return is the same as filing the tax return on or before the due date
• While filling the ITR form, select “Return filed under Section 139 (4)”
• If you are filing a belated return for FY 2022-23 (AY 2023-24), then you need to fill the applicable ITRs as notified for FY 2022-23
• Co-browsing facility provided by the tax department can be utilised by taxpayers who require technical assistance while filing their belated ITR online
• Support agents can guide users through the e-filing process, helping them navigate the website and complete the necessary steps accurately