Synopsis
The last date for filing ITR for FY 2021-22 (AY 2022-23) is July 31, 2022. If an individual misses this deadline to file ITR, there is a monetary and non-monetary cost. An individual filing belated ITR is required to pay a late filing fee for a maximum up to Rs 5000. Apart from this, there are certain disadvantages to filing belated ITR.
The last date for filing income tax return (ITR) for FY 2021-22 (AY 2022-23) is July 31, 2022. This deadline is applicable for individuals whose accounts are not required to be audited. If you do not file your ITR by the deadline, you will not only have to pay a late filing fee but there are other disadvantages as well.
As per current income tax laws, a late filing fee of up to R. 5,000 is levied if a belated ITR is filed. However, for small taxpayers, the late filing fee is of Rs.1,000 if the taxable income does not exceed Rs.5 lakh. The late filing fee is levied under section 234F of the Income-tax Act, 1961. Do note that this late filing fee must be paid before the belated ITR is filed.
Yashesh Ashar, Partner, Bhuta Shah & Co LLP - a Mumbai-based chartered accountant firm explains the benefits that are lost for not filing ITR before the expiry of deadline.
1) If an individual files an income tax return after the expiry of the deadline, then he/she will not be able to carry forward the losses under the following heads:
a) Income from other sources
b) Income from capital gains
c) Income from business and profession including speculation business
However, an individual is allowed to carry forward losses under the head 'Income from house property'.
2) If there is an income tax refund due, then tax refund will be payable only if the ITR is filed and verified.
3) An individual is eligible for interest on income tax refund at the rate of 0.5% per month. However, if an individual files belated ITR to claim an income tax refund, then no interest is payable on the income tax refund.
4) An individual is liable to pay penal interest if there are any tax dues pending at the time of filing belated ITR. Penal interest is levied under section 234A, 234B and 234C, depending on the type of tax that is due.
Penal interest under section 234A is levied if an individual fails to deposit self-assessment tax before July 31. Similarly, penal interest under section 234B is levied if an individual fails to deposit 90% of the advance tax before March 31 of the financial year. Penal interest under section 234C is levied if an individual has not made an advance tax payment during the previous financial year.
The penal interest under all three sections is levied at 1% per month on the tax amount dues.
Other things to keep in mind
Individual taxpayers should note that there is a deadline for filing belated ITR as well. If an individual misses the date to file ITR, i.e., July 31, 2022, for FY 2021-22, then one must file the belated ITR on or before December 31, 2022, for FY 2021-22.
If an individual misses the December 31, 2022, deadline, then he/she will not be able to file ITR unless the income tax department sends him/her notice for filing the same.
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