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Similar to the previous year, the government has extended the ITR filing deadline for 2019 as well. With a grace period of 1 month, taxpayers have until August 31 to file their tax returns instead of July 31. The obvious purpose of this extension is to allow more people to file their income tax returns. It also allows more taxpayers to invest in tax-saving instruments and bring down their tax liability.
In 2018, the government announced stiff penalties for those missing the extended deadline of August 31. This prompted more people to file income tax returns before the deadline. As opposed to 3.17 crore people e-filing returns in 2017, a record number of 5.42 crore taxpayers filed returns electronically before the August 31 deadline in 2018. Almost 35 lakh people filed returns on the last day of the deadline alone.
But what happens if you miss the ITR filing deadline? What is the penalty for late filing of ITR? If you have asked these questions, you have probably missed the ITR filing deadline this year. Don’t worry; there’s still hope with belated returns but it comes at a cost and depends upon your tax liability.
From this year onwards, the penalty for late filing of ITR is up to a maximum of Rs. 10,000. In case you miss the August 31, be ready to shell out more. But you don’t have to worry about paying penalty if your income is below the taxable limit.
Until assessment year 2017-18, there was no penalty for late filing of returns, but the government changed that in 2018 according to section 234F of the Income Tax Act.
The amount of late ITR filing fees that you have to pay depends upon various scenarios.
If ITR is filed after August 31 but before December 31, 2019, the taxpayer will have to pay Rs. 5,000 as penalty.
If tax return is filed after December 31, 2019 but before March 31, 2020, the taxpayer is liable to pay Rs. 10,000 as penalty for late filing of ITR.
However, the government has provided relief for small taxpayers in this case. If your gross annual income does not exceed Rs. 5 lakh, the maximum penalty you are liable to pay for belated returns is Rs. 1,000.
According to chartered accountants, an individual whose gross income is below the basic exemption limit (Rs. 2.5 lakh for individuals below 60 years) is not liable to pay any fines even if they file belated returns. The basic exemption limit for senior citizens between 60-80 years is 3 lakh and for super senior citizens (above 80 years) is 5 lakh in India.
Apart from the penalty there are other disadvantages of filing a belated return to a taxpayer.
You lose out on interest paid on refund from the income tax department. For example, if you are eligible for a refund and have filed the return before the due date, interest on the refund is calculated from April 1 to the date when the refund is made. If you file a belated return, interest on refund is calculated from the day you filed the return to the day the refund was granted.
You won’t be able to carry forward losses if you file ITR after the due date.
However, if you are showing loss under income from house property, you can carry forward the loss even if you are filing after the deadline.
The process of filing a belated return is similar to that of filing ITR before or on the due date. The only difference is that while selecting the applicable ITR form, you need to select “Return filed under section 139(4)” in the drop-down menu.
If there are errors in the return that you have filed after the due date, you can still rectify it by filing a revised return. Also remember to e-verify or send your ITR V for verification to the income tax department within 120 days of filing the return.
Lastly, as you have learned about the repercussions of missing the deadline for ITR filing, you have stronger reasons now not to miss the extended deadline this year. If you are just a little bit careful and have all the information and documents handy, filing your IT return online is a fast, easy and smooth process.
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