What is the last date to file a belated ITR under Section 139(4)?

The last date to file a belated Income Tax Return (ITR) under Section 139(4) is typically December 31 of the assessment year or before the completion of assessment, whichever occurs first. This extended deadline allows taxpayers to file their returns after missing the initial due date, which is usually July 31 of the assessment year. It is crucial to file within this period to avoid further penalties and complications.

What penalties apply for belated ITR filing?

Filing a belated return incurs penalties as per the Income Tax Act. Under Section 234F, a late filing fee of up to Rs. 5,000 applies if the return is filed after the due date. For taxpayers with income below Rs. 5 lakh, the penalty is reduced to Rs. 1,000. Additionally, interest is charged on unpaid taxes under Section 234A, calculated at 1% per month on the outstanding amount from the due date until the actual filing date.

Can I claim tax deductions if I file a belated return?

No, filing a belated return has significant restrictions on deductions. From FY 2023-24 onwards, belated returns must be filed under the new tax regime, which limits deductions and exemptions compared to the old regime. Taxpayers lose out on various deductions such as those under Sections 80C, 80D, and others available under the old regime.

Will I get a refund if I file a belated return?

Yes, taxpayers filing a belated return are still eligible for refunds if they meet the necessary criteria. However, refunds may be delayed due to additional scrutiny by the Income Tax Department. Mismatches or filing errors can cause further delays. Refund status can be tracked through platforms like TaxBuddy, which provides real-time updates.

How does TaxBuddy assist with tax notices after belated filing?

TaxBuddy offers expert review of tax notices. Taxpayers can upload notices on TaxBuddy’s platform, where professionals assess the issues and assist in filing the required response through the Income Tax e-filing portal. This ensures correct, timely responses, reducing the risk of penalties.

Can I file a belated return if I missed the December 31 deadline?

If you miss the December 31 deadline, you may request condonation of delay from the Income Tax Commissioner. This is discretionary and not guaranteed. The department evaluates reasons for delay before granting permission. It's advisable to file before the deadline to avoid complications.

How does belated filing impact my loan eligibility?

Late or irregular tax filings can raise concerns with financial institutions during loan or credit applications. Proof of timely tax filings is often required for credit assessments. Consistently filing belated returns may harm credibility and affect loan eligibility, as lenders may see you as a high-risk borrower.

Does TaxBuddy assist with carrying forward losses from belated filings?

Yes, TaxBuddy provides tax planning services to ensure proper filing even for belated returns. While business and capital losses are generally not eligible for carry-forward if filed late, exceptions exist such as losses related to house property. TaxBuddy experts guide taxpayers on handling eligible losses.

What happens if my belated return is found defective?

If found defective, the Income Tax Department may issue a notice under Section 139(9) to rectify issues. This may involve submitting documents, correcting information, or addressing discrepancies. Prompt response is crucial to avoid penalties or prolonged scrutiny. TaxBuddy assists by reviewing returns and facilitating necessary corrections.

Is it possible to resolve tax notices through TaxBuddy?

Yes, TaxBuddy provides expert services for handling tax notices. Taxpayers can upload notices for review, and experts guide them through filing proper responses via the Income Tax e-filing portal, ensuring compliance and minimizing penalties.

How long does it take for tax refunds after filing a belated return?

Refunds after filing a belated return may take longer due to additional scrutiny by the Income Tax Department. Taxpayers can track refund status using platforms like TaxBuddy, which provides real-time updates. Delays can occur due to discrepancies or requests for clarification.

What is the impact of filing a belated return under the old tax regime?

Taxpayers filing belated returns under the old tax regime may lose benefits, as the new tax regime applies to all belated returns from FY 2023-24 onwards. The old regime offers more deductions under sections like 80C and 80D, which are unavailable under the new regime, potentially increasing tax liability.

Impact of Belated ITR Filing Under Section 139(4): Consequences and Tax Notices

PRITI SIRDESHMUKH
May 16
7 min read

Filing your Income Tax Return (ITR) within the prescribed deadline is crucial for ensuring compliance with the law and avoiding unnecessary complications. However, life’s unpredictability can sometimes lead to missed deadlines. Thankfully, Section 139(4) of the Income Tax Act offers taxpayers an opportunity to file a belated return if they miss the original due date, typically July 31. While this provision helps individuals and businesses regularize their tax filings, it comes with its own set of challenges. Belated filing carries financial consequences, such as penalties, interest on unpaid taxes, and a higher risk of receiving tax notices. Understanding these ramifications is key to navigating the process effectively and minimizing the impact of the delay.

What is Belated ITR Filing Under Section 139(4)?
Consequences of Belated ITR Filing
Handling Tax Notices Due to Belated Filing
Conclusion
FAQs

What is Belated ITR Filing Under Section 139(4)?

Section 139(4) provides a lifeline to taxpayers who miss the deadline for filing their Income Tax Return. This provision allows taxpayers to file a belated return, with the final date for submission being December 31 of the assessment year or before the completion of the assessment, whichever occurs first. While this extension gives taxpayers a chance to rectify their oversight, it comes with certain drawbacks. Among the most significant are the additional penalties, interest charges, and limitations on available deductions.

Consequences of Belated ITR Filing

Late Filing Fees and Penalties

When you file your ITR after the deadline, Section 234F imposes a late filing fee. The penalty can be as high as Rs. 5,000, but if your income is below Rs. 5 lakh, the penalty is reduced to Rs. 1,000. This fee is levied as a deterrent for non-compliance and to encourage timely filing.

Interest on Tax Due

In addition to late fees, taxpayers who miss the deadline may be subject to interest charges under Section 234A. This interest is calculated at 1% per month or part of the month on any unpaid tax amount from the original due date until the date the belated return is filed. As the interest continues to accumulate over time, it can significantly increase your overall tax liability.

Disallowed Deductions and Exemptions

From the Financial Year 2023-24, belated returns must be filed under the new tax regime, which restricts many of the deductions and exemptions available under the old tax regime. This limitation means that taxpayers may miss out on potential tax-saving opportunities they would have been eligible for had they filed their return on time.

Ineligibility to Carry Forward Losses

Another key consequence of belated filing is the inability to carry forward business and capital losses to future years. If your return is filed late, these losses cannot be carried forward for adjustment against future taxable income, except for losses related to house property. This can have a significant impact on your tax planning and future tax liabilities.

Increased Risk of Tax Notices

One of the most significant consequences of belated filing is the increased likelihood of receiving tax notices. Filing a return after the due date may attract closer scrutiny from the Income Tax Department. Notices under sections such as 139(9) (for defective returns) or 142(1)(for inquiries) may be issued, requiring you to respond promptly. Failure to address these notices can lead to further penalties or legal consequences.

Legal Consequences

Continued failure to file returns on time can have severe legal repercussions, including prosecution. In extreme cases, such as persistent non-compliance or fraudulent activities, the Income Tax Department can impose penalties or even imprisonment for up to seven years. Therefore, it is crucial to prioritize timely filing to avoid these serious outcomes.

Handling Tax Notices Due to Belated Filing

If you receive a tax notice due to filing a belated return, it’s important to address it promptly. Failing to respond adequately can result in additional complications, including penalties or legal action. Platforms like TaxBuddy can assist you in managing these notices. TaxBuddy allows you to upload your notices, which are then reviewed by experts who ensure that your responses are filed correctly through the Income Tax e-filing portal. This expert assistance can alleviate the stress of dealing with tax notices and help minimize the risk of further penalties.

Conclusion

Filing a belated ITR under Section 139(4) offers a chance to meet tax obligations after missing the original deadline, but it comes with a variety of consequences. These include financial penalties, interest on unpaid taxes, and the restriction of certain deductions and exemptions. Additionally, there is an increased risk of receiving tax notices that require careful attention. To ensure that the belated filing process is as smooth as possible, it’s beneficial to use a platform like TaxBuddy. TaxBuddy provides expert assistance in filing returns, managing tax notices, and ensuring compliance with the latest tax regulations. For anyone looking for assistance in tax filing, it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.

Frequently Asked Question (FAQs)

What is the last date to file a belated ITR under Section 139(4)?
The last date to file a belated Income Tax Return (ITR) under Section 139(4) is typically December 31 of the assessment year or before the completion of assessment, whichever occurs first. This extended deadline allows taxpayers to file their returns after missing the initial due date, which is usually July 31 of the assessment year. It is crucial to file within this period to avoid further penalties and complications.
What penalties apply for belated ITR filing?
Filing a belated return incurs certain penalties as per the Income Tax Act. Under Section 234F, a late filing fee of up to Rs. 5,000 is applicable if the return is filed after the due date. However, for taxpayers with an income below Rs. 5 lakh, the penalty is reduced to Rs. 1,000. In addition, interest is charged on unpaid taxes under Section 234A, calculated at 1% per month on the outstanding amount from the due date until the actual filing date.
Can I claim tax deductions if I file a belated return?
No, filing a belated return has significant restrictions, particularly for taxpayers wishing to claim deductions. From FY 2023-24 onwards, if a taxpayer files a belated return, they must do so under the new tax regime. This regime has limited deductions and exemptions compared to the old tax regime. As a result, taxpayers lose out on various deductions such as those under Sections 80C, 80D, and others that would have been available under the old regime.
Will I get a refund if I file a belated return?
Yes, taxpayers filing a belated return are still eligible for refunds, provided they meet all the necessary criteria for claiming refunds. However, there may be delays in processing the refund due to additional scrutiny by the Income Tax Department. Factors such as mismatches or errors in the filing may further delay the refund process. Taxpayers can track their refund status through tools like TaxBuddy, which provides real-time updates on the progress.
How does TaxBuddy assist with tax notices after belated filing?
If you receive a tax notice after filing a belated return, it is essential to respond promptly and accurately. TaxBuddy helps by offering expert review of tax notices. Taxpayers can upload their notices on the TaxBuddy platform, where professionals will assess the issue and assist in filing the required response through the Income Tax e-filing portal. This service ensures that your responses are correct and filed within the required timeframe, reducing the risk of additional penalties or issues.
Can I file a belated return if I missed the December 31 deadline?
If you miss the December 31 deadline for filing a belated return, you may still request condonation of delay from the Income Tax Commissioner. However, this is a discretionary process, and approval is not guaranteed. The Income Tax Department will evaluate the reasons for the delay before granting permission. Therefore, it’s always better to file your return before the deadline to avoid unnecessary complications.
How does belated filing impact my loan eligibility?
Late or irregular tax filings can raise red flags with financial institutions, especially when applying for loans or credit. Financial institutions often require proof of regular and timely tax filings as part of their credit assessment process. Consistently filing belated returns may harm your credibility and affect your loan eligibility, as lenders may perceive you as a high-risk borrower. Maintaining a clean and timely tax record is crucial for ensuring smooth access to credit.
Does TaxBuddy assist with carrying forward losses from belated filings?
Yes, TaxBuddy provides comprehensive tax planning services that ensure the proper filing of returns, even for those who have filed belated returns. While business and capital losses are generally not eligible for carry-forward if filed late, there are exceptions, such as losses related to house property. TaxBuddy’s experts can guide you through the process, ensuring that any losses you are eligible to carry forward are handled correctly in your tax filings.
What happens if my belated return is found defective?
If your belated return is found to be defective, the Income Tax Department may issue a notice under Section 139(9), requiring you to rectify the issues in your return. This could involve providing additional documents, correcting misreported information, or addressing discrepancies in your filing. It’s crucial to respond to such notices promptly to avoid further complications, such as penalties or prolonged scrutiny. TaxBuddy can assist by reviewing your return and helping you make the necessary corrections efficiently.
Is it possible to resolve tax notices through TaxBuddy?
Yes, TaxBuddy provides expert services for handling tax notices. If you receive a notice after filing your return, whether belated or otherwise, TaxBuddy allows you to upload the notice for a thorough review. Tax experts will assess the situation and guide you through the process of filing a proper response through the Income Tax e-filing portal, ensuring compliance and minimizing the risk of further penalties or issues.
How long does it take for tax refunds after filing a belated return?
Tax refunds after filing a belated return can take longer than usual due to additional scrutiny by the Income Tax Department. While the process may take some time, taxpayers can track the status of their refund using platforms like TaxBuddy, which provides real-time updates. Any discrepancies or additional clarifications may cause delays, but consistent follow-up ensures that you receive your refund as soon as possible.
What is the impact of filing a belated return under the old tax regime?
Taxpayers who file their belated returns under the old tax regime may lose out on certain benefits, as the new tax regime applies to all belated returns filed from FY 2023-24 onwards. The old tax regime offers more tax-saving opportunities, such as deductions under Section 80C, 80D, and others, which are no longer available under the new regime. As a result, taxpayers may end up paying more taxes, as they will not be able to claim the same deductions.