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Missed the due date of filing ITR for the financial year 2022-23? According to the Income Tax Department, over 10 million taxpayers filed their ITRs after the due date. Well, it costs some penalties. But the penalty is not the only consequence that happens if someone misses the due date. In this guide, we will discuss the benefits of timely filing of ITR, penalties for late filing, and interest applied on due taxes. Read on to learn more!
The following are the deadlines for filing income tax returns (ITRs) for the financial year 2022-23, depending on the type of taxpayer and the nature of their income:
Starting from FY 2017-18, you will have to pay a late filing fee under Section 234F if you file your returns past the deadline.
For example, the deadline for filing returns for FY 2022-23 is 31st July 2023. You can still file the belated return by 31st December 2023 if you miss the deadline, but you will have to pay a fine for late filing.
The fine will be Rs 5,000 if you file your ITR between 31st July 2023 and 31st December 2023. However, small taxpayers get some relief – if their total income is less than Rs 5 lakh, the fine for late filing will be only Rs 1,000.
Disallowance of expenses: If you claim certain expenses in your ITR, such as business expenses or medical expenses, these expenses may be disallowed if you do not file your ITR on time.
Criminal prosecution: In extreme cases, the Income Tax Department may even initiate criminal prosecution against you for willful evasion of taxes. This could lead to imprisonment and other penalties.
Set-off losses are not allowed: You can only carry forward losses to subsequent years if you file your return within the due date. This does not apply to house property losses, which you can carry forward regardless. You also need to file your return on time if you want to offset your losses with future gains, except for house property losses.
Delated Refund: Filing your ITR after the due date also delays the refund, if any.
Interest: If you have any tax liability, you will be charged interest on the outstanding amount from the due date of filing the ITR. The interest rate is currently 1% per month.
Unable to opt for New Tax Regime: Salaried employees will be unable to choose the new tax regime while filing belated ITRs.
Easy loan approval: Banks and other financial institutions often require a copy of your ITR as proof of your income and financial standing. Filing your ITR on time will show that you are a responsible taxpayer and that you have a stable income, which can make it easier to get approved for a loan.
Tax refund: If you have overpaid your taxes, a refund can be claimed by filing your ITR on time. The sooner you file your return, the earliest you will receive your refund.
Quick visa processing: Some countries require you to submit a copy of your ITR while applying for a visa. Filing your ITR on time will help to ensure that your visa application is processed more quickly.
Carry forward of losses: If you have losses from your business or profession, you can carry them forward to future years only when ITR is filed on or before the due date and set them off against your income in those years. This can help to reduce your tax liability in the future.
If your gross total income is more than Rs 2.5 lakh in a financialyear and you are under 60 years old, you need to file ITR. The basic exemption limit for these individuals is the same in both the old and new tax regimes.
Individuals whose gross total income falls below the basic exemption limit are not required to pay any late fees under section 234F for filing their Income Tax Return (ITR) after the deadline has passed.
