Penalty for Late Filing of Income Tax Return for FY 2023-24: 234F of Income Tax Act
Updated: Aug 2
On-time filing of the income tax return is essential for every taxpayer in India. Apart from late filing charges, delayed filing has multiple consequences and other inconveniences. Through this article, an attempt is made to explain the provisions under Section 234F of the Income Tax Act pertaining to late filing charges under ITR and also other impacts of delay in filing the same are highlighted.
Table of Content
Penalty for Late Filing of Income Tax Return for FY 2023-24
Under Section 234F of the Income Tax Act, there are penalties if a taxpayer fails to file their ITR on or before the due date. Now, the financial year 2023-24 has scaled down the late filing fee to INR 5,000. This is related to a reduction from the previous maximum fine of INR 10,000. In such cases where total income does not go beyond INR 5 lakh, for small taxpayers, the penalty shall not exceed INR 1,000.
Late Filing Fee Details
Below is the summary of penalty for late filing, which varies based on the income level of the taxpayer:
On or Before 31st July 2024:Â INR 0 for all income levels
Between 1st August 2024 to 31st December 2024:Â INR 1,000 for total income below INR 5 lakh; INR 5,000 for total income above INR 5 lakh.
For instance, in the case of income above INRÂ 5 lakh, if the return is filed on 1st September 2024, a penalty of INRÂ 5,000 will be charged to the taxpayer.
Reduced Time for Revising Your Return
The time to revise the filed ITR has also been drastically cut down. One had as long as two years to revise the return. However, under the revised rules, this time is now nine months from the end of the financial year. Thus, the deadline for revising the ITR for the assessment year 2024-25 is 31st December 2024. This in itself is a strong reason why filing needs to be done early enough to leave sufficient time for corrections.
Payment of Interest
Apart from the fines, late filing of ITR involves interest on unpaid tax by taxpayers. Under Section 234A, interest runs at 1 percent per month or part of a month on the amount of tax outstanding. Such interest is computed from the day immediately following the due date till the date of payment. Hence, the longer one delays, the more interest will have to be paid.
Carry Forward of Losses is Not Permitted
In case of losses incurred by taxpayers under any head, like capital gains or business income, filing of returns is essential to carrying forward these losses to future years. If the assessees fail to do so, no carry forward of losses is allowed that might have been available to set off against future taxable income. House property losses, however, can be carried forward even in the case of a late filing of the ITR.
Delay in Receiving Refunds
Filing of ITR on time is necessary for processing refunds on excess tax paid. In case it is filed late, then the processing of refunds gets delayed, and it takes a longer time for the money to come back to the taxpayer. Furthermore, the income tax department does not pay any interest on delayed refunds if the return is filed late.
Reasons for Delay in Refund
Refund processing can get delayed on various grounds, such as errors in the return filed, insufficient documents, and mismatches between the return and the TDS. The taxpayers have to ensure all information furnished is correct and complete to avoid delay.
FAQ
Q1. Do I need to file an ITR if my income is below the exemption limit?
No, if your total taxable income for the financial year is below INR 2,50,000, there is no requirement to file an ITR.
Q2. What are the consequences of filing a late ITR?
Late return filing also attracts a penalty under Section 234F and interest on unpaid tax under Section 234A. Further, late filing may delay refunds and plainly disallow the carry forward of certain losses.
Q3. What if I make a mistake in my ITR?
You can revise your ITR to correct mistakes. However, the time available for revisions is now limited to nine months from the end of the financial year.
Q4. Will I still be able to carry forward business losses if I file late?
No, in the case the return is filed after the due date, business or capital losses cannot be carried forward.
Q5. How does late filing impact my tax refund?
Late filing postpones the processing of any refund refundable to you on account of excess tax paid by you.
Q6. Will there be a late filing penalty if my income is below INR 5 lakh?
Yes. However, in such cases the penalty will not exceed INR 1,000.
Q7. What would be the interest rate if tax is not paid on time because of late filing?
1% per month or part of a month on the outstanding amount of tax.
Q8. Can I revise my return after the due date?
Yes, you can revise your return before 31st December of the assessment year or completion of the assessment, whichever is earlier.
Q9. What if I have a tax refund and I have filed ITR late?
Late filing may delay your refund, and you will lose your interest on the delayed refund.
Q10. Are there any exceptions for carrying forward losses if I file late?
Yes, loss from house property can nevertheless be carried forward if you file your ITR late.
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