Late filing of Income Tax Returns (ITR) can put you in a lot of distress. To avoid it, it is important to file your ITR promptly. In this article, let’s discuss the last date to file an ITR and the consequences of filing it late.
What is the last date to file ITR?
July 31, 2023, is the last date to file taxes for Assessment Year (AY) 2023-24 for assessees whose account books do not need to be audited. In the last couple of years, the government has extended this deadline. However, the Revenue Secretary has confirmed that there will be no extension of the time limit for AY 23-24 for those whose accounts don’t require an audit.
It is recommended to file your ITR even though it is not compulsory. This means, it is good to file your ITR even if your income is below the taxable income threshold (₹2,50,00 under the old tax regime and ₹3,00,000 in the new tax regime ).
The importance of the ITR receipt
ITR receipts have more details about your taxes than Form 16. It contains all the details of your total income, including your income from other sources.
Now that we have answered the question- what is the last date to file ITR, let’s understand why timely filing your ITR is essential.
Penalty for late filing under section 234F:
Failing to file your ITR will attract penalties and other inconveniences. Under Section 234F of the Income Tax Act, implemented on April 1, 2017, you will be liable to pay a maximum penalty of ₹ 5,000 for failing to file your ITR within the last date.
From the financial year 2021, the government has reduced the penalty amount from ₹10,000 to ₹5,000. Hence, if you file after the deadline of July 31, 2023, you will be charged a ₹5000 penalty for the delay. However, if you are a small taxpayer and your total gross income does not exceed ₹5 lakh, the maximum penalty amount is ₹1,000.
| E-filing | Total Income below ₹5 lakh | Total Income above ₹5 lakh |
| July 31, 2023 | NIL | NIL |
| Between 1st August 2023 to 31st March 2024 | ₹1,000 | ₹5,000 |
Payment of interest:
If one does not file ITR on or before the due date, one also has to pay interest apart for the penalty. This is at the rate of 1 per cent every month or part of a month on the amount of tax unpaid as per section 234A. This interest rate is payable until you file your IT returns. Remember that you cannot submit your returns without paying your taxes.
The disadvantages of not filing your ITR returns by the due date :
You don’t have time to correct errors
Filing your ITR on time is also essential for other reasons. If you make a mistake in your ITR filing, you only have time until the end of the relevant assessment year to make the change. Earlier, taxpayers were given a 2-year window to fix the errors, but it has now been reduced to 1 year. If you are filing late, even a fundamental error can land you in trouble.
Carrying forward losses not allowed
You can carry forward capital gain losses or losses incurred in your business to coming years if you file within the due date. In this way, you can offset current losses with future gains. Carrying forward losses would reduce your tax outgoings in the future. However, if you do not file your ITR by the due date, this method is not allowed.
Delay in refund
If you think you’re eligible for a refund, it is vital to file your return by the deadline. If you are late in filing your ITR, your refund will also be delayed. Also, you will not receive any interest on it.
There are also other reasons to file your ITR on time. For instance, if you are applying for a high-value loan, like a car loan or a home loan, the bank will ask for your IT returns from the last 3 years. If you have not paid your ITR, getting loans will become a hassle.
Income Tax Returns are also essential to applying for Visas in some countries like the United States, the United Kingdom, Canada, and Australia. This is to prove your tax compliance. The idea is to assess your income and make sure that you can pay for expenses on your trip.
