Filing income tax returns (ITR) in time is crucial for taxpayers to not miss out on any benefits, but sometimes individuals miss the deadline for filing their returns.
According to Section 139 (4) of the Income Tax Act, any ITR filed after this due date is referred to as a belated return.
While this provision offers a second chance to comply with tax regulations, it also comes with certain repercussions.
What is a belated ITR?
A belated income tax return is an ITR that is filed after the original due date of July 31 but before December 31 of the relevant assessment year.
This allows taxpayers who missed the initial deadline to still submit their returns and fulfill their legal obligations.
However, filing a belated return, although permissible, has several consequences that taxpayers should be aware of.
Under Section 234F of the Income Tax Act, a late filing fee is levied on taxpayers filing their returns after the due date.
The fee structure is Rs 5,000 if the return is filed on or before December 31 of the assessment year and Rs 10,000 if filed after December 31 but before the end of the assessment year.
If the total income does not exceed Rs 5 lakh, the late fee is limited to Rs 1,000. Only in some rare cases will individuals be able to file ITR after the deadline without being penalised.
Taxpayers who are eligible for a refund might lose out on the interest for the perod of delay since the interest on the refund amount is calculated from the date of filing the return.
Additionally, losses under the head ‘Income from house property’ can be carried forward even if the return is filed late, but other losses, such as business loss or capital loss, cannot be carried forward if the return is filed after the due date.
Continuous delay in filing the ITR can attract penalty and prosecution under the Income Tax Act, depending on the nature and amount of tax evasion involved.
Taxpayers who have outstanding tax liability are required to pay interest on the unpaid amount under Sections 234A, 234B, and 234C of the Income Tax Act. Filing a belated return means the taxpayer will incur additional interest on the due tax.
How to file a belated ITR?
Filing a belated ITR is a straightforward process.
Taxpayers need to visit the official website of the Income Tax Department and log in using their credentials.
They must select the relevant assessment year, fill in the necessary details regarding income, deductions, and taxes paid, submit the return, and verify it using available options such as Aadhaar OTP, net banking, or sending a signed ITR-V to the Centralised Processing Center (CPC) in Bengaluru.
While filing a belated ITR is better than not filing at all, it is always advisable to file returns within the stipulated time frame to avoid any penalties and complications.