The Buyt Desk
If you miss the last date of filing your income tax return then you do get a second chance. It is called belated income tax return filing. However, the service doesn’t come free. You will have to pay a penalty along with additional interest on taxes to get the facility. The window for the same is open till the 31st March, i.e. three months from the announcement of the last date.
What is Belated Income Tax Return Filing?
Belated income tax return filing means filing ITR after the due date set by the income tax department. In this arrangement, a taxpayer gets three months window period to file ITR after paying penalty and other charges.
In addition to that, section 139 (1) of the Income Tax Act allows an assessee (not a company) whose account is not required to be accessed by any chartered accountant to file ITR before or latest by 31st July of the relevant financial year.
However, if someone fails to file ITR by 31st July, then by using section 139 (4) of the Income Tax act, one can file the ITR within the next three months, but it must be before 31st December of the relevant financial year.
One should make sure to file the ITR before the due date. Because if the last deadline is missed, taxpayers do not get any other chance to file ITR voluntarily. In such a case, the taxpayer can get an income tax notice.
Penalty and Interest Charged In Belated ITR Filing
The belated ITR filing attracts a penalty. The penalty includes a late filing fee charge under Section 234F of the Income Tax (I-T) Act, which is Rs 1,000 in the condition that the Gross Total taxable income of the taxpayer does not exceed Rs 5 Lakhs in a financial year, else it is Rs 5,000.
In the case when the gross income of the taxpayer remains below the basic limit of tax exemption, there is no late fee for filing the belated return (but there are certain exceptions).
The primary exemption limit is Rs 2.5 Lakh for taxpayers up to the age of 60 years, and it is Rs 3 Lakhs for individuals within the age of 60 years and 80 years. It is Rs 5 Lakhs for people 80 years of age.
Additionally, when there is any tax due, belated tax filing attracts penal interest as well. The interest charged under section 234A is 1 per cent per month or part charged on the unpaid amount. The interest calculation starts from the ITR filing date right after the due date, 31st December 2021, for AY 2021-22.
On the other hand, when the outstanding tax liability is either Rs 1 Lakh or more, the interest would be levied from the original due date up to the ITR filing date. The original due date for FY 2021-22 was 31st July 2021. The conclusion is that the longer you wait to file ITR, the more you will have to pay.
Limitations Of Belated Income-tax Return
Besides the penalty and interest on due taxes, belated ITR has certain limitations as well. They are “No loss under the head “capital gain”, “loss from owning and maintaining race horses” and “business and profession” will be allowed to be forwarded or set off from succeeding years.
Nevertheless, loss from the head “unabsorbed depreciation” and “house property” can be taken forward. Additionally, if the taxpayer remains eligible for the refund, he gets the interest under Section 244A of the Act, on such refund due on account of excess TDS/TCS/ advance tax.
The belated ITR filing gives an option to taxpayers to file ITR after the due date, however, a taxpayer should avert this situation as they have to pay a significant amount as a late fee, penalty and interest in totality.
