ITR Filing 2024 Deadline: How much will you pay as penalty if you miss filing income tax return on July 31?

An income tax return is a summarised document that contains information about a taxpayer’s earnings over the course of a fiscal year. If an individual misses filing income tax return that he or she will have to pay penalty. The Income Tax department has distinct tax rates for different income brackets.

Additionally, the I-T department issues reminders to individuals to prompt timely filing of their income tax returns. Non-compliance, such as failing to settle obligations or neglecting to file ITR, may result in fines and penalties.

For the financial year that concluded on 31 March 2024, the deadline for individuals to submit their Income Tax Returns (ITRs) is on July 31, 2024. However, the process of filing ITRs can be quite laborious, especially for individual taxpayers, who may struggle to grasp the various schedules and disclosures that are necessary for the submission of their ITRs.

The task of compiling all the required information and maintaining a record of expenses incurred in the preceding year can be daunting, potentially resulting in individuals missing the filing deadline. Consequently, many individuals may find themselves needing additional time to complete their tax returns in order to avert any adverse actions from the Income Tax authorities.

The Income-tax Department has provided taxpayers, who have missed the original tax filing deadline with an opportunity to file a belated return before the end of the calendar in which the return was to be filed i.e., 31 December.  Thus, the time limit for filing a belated return for AY 2024-25 will be 31 December 2024.

Penalty on belated ITR

When a taxpayer files a belated income tax return, they may incur penalties based on their income level. Specifically, a penalty of Rs. 1,000 applies if the income is below Rs. 5,00,000, while a penalty of Rs. 5,000 is enforced if the income exceeds Rs. 5,00,000. Additionally, late filers might face penalties in the form of interest charges and the loss of certain benefits typically enjoyed by timely filers.

Ensuring tax compliance is crucial as it is a legal obligation that taxpayers must adhere to. Responsible financial practices are essential for a seamless and trouble-free tax filing process. For further insights into the consequences of delayed income tax return submissions and options for requesting extensions, please find detailed information below.

Under the provisions specified in section 234F of The Income Tax Act, individuals who file their Income Tax Returns (ITR) after the due date are subject to a late filing penalty. It is important to note that the maximum penalty for late filing has been revised by the Income Tax Department to Rs 5,000 starting from the Financial Year 2021, down from the previous limit of Rs. 10,000.

However, taxpayers are advised to adhere to the filing deadlines as missing the deadline can result in not just the late filing penalty, but also other penalties and restrictions enforced by the Income Tax Department.

For individuals with a total income of INR 5 lakh or less, the late filing penalty is capped at Rs 1,000, offering some relief to small taxpayers. On the other hand, individuals with higher incomes may be liable to pay the full penalty of Rs 5,000 if they fail to file their ITR within the specified deadline.

Interest on unpaid taxes

Late filers may be subject to penalties and owe interest on unpaid taxes, as per Section 234A of the Income Tax Act. The interest rate is currently 1% for each month or part thereof, calculated from the day after the deadline for filing the ITR. This interest is designed to discourage delayed tax payments and promote prompt compliance.

To facilitate the prompt processing of government refunds for overpaid taxes, taxpayers should submit their ITRs before the deadline. Failing to do so may result in prolonged waits for refunds, creating financial difficulties and potential cash flow challenges.

Exemptions from Penalty

If an individual’s taxable income is below the basic exemption limit and they need to file an Income Tax Return (ITR) to claim a refund, they are not liable to pay a penalty for late filing. Taxable income below the basic exemption limit refers to the gross taxable income before any deductions are made.

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