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A Complete Guide on the New Income Tax Section 234F

(Fee for delayed filing of Income Tax Return)

Updated on: 06 Sep, 2022 12:42 PM
Belated ITR filing: If you have missed the deadline of filing income tax return for FY 2021-22, July 31, 2022, then you have an option to file the belated ITR.

Not filing your ITR within the deadline can lead to a penalty or late filing fees, besides inconveniences attached to the delay. Section 234F covers everything about late filing fees and the condition in which it becomes applicable. In this guide, we have covered each and every aspect related to the applicability of section 234F as per Income Tax Act 1961. Read carefully to avoid being the victim of section 234F penalty.

What is the meaning of Section 234F?

As per section 234F of the Income Tax Act, if a person is required to an file Income Tax Return (ITR forms) as per the provisions the of Income Tax Law [section 139(1)] but does not file it within the prescribed time limit then late fees have to be deposited by him while filing his ITR form. The quantum of fees shall depend upon the time of filing the return and the total income.

When is a person mandatorily required to file Income Tax Return?

If you fall in the below conditions then you have to mandatorily file your income tax return:

  1. If your total income exceeds the basic exemption limit If an individual's income exceeds the maximum exemption level, i.e., 2.5 Lakhs in case of an individual having age of less than 60 years, 3 lakhs in case of resident senior citizen (age 60 years or more), 5 lakhs in case of resident super senior citizen (age 80 years or more), he or she must file a return. If you opt for the new tax regime, you are not eligible to claim the different exemptions available under the old tax regime.
    As per the old tax regime, the minimum exemption limit shall not be calculated after deducting the exemptions from capital gains under sections 54, 54B, 54D, 54EC, 54F, 54G, 54GA or 54GB and deduction under Section 80C to 80U.
  2. If you have assets outside India It is necessary for an individual to file a tax return if he/she:
    • has (as a beneficiary or otherwise) any asset (including any financial interest in any company) located outside of India
    • has signing authority in any account located outside India
    • is a beneficiary of any asset located outside of India (including any financial interest in any organisation).

    This clause will apply to both residents and ordinary residents in India.
  3. If you deposit more than Rs 1 crore in a bank account If a person has deposited Rs 1 crore or more in one or more current accounts with a bank during the previous year, he/she must file his return.
    There has been no mention of the deposit placed in a Post Office current account. Thus, if a person deposits more than Rs 1 crore in a post office current account and his income is less than the basic exemption limit, he may not be obliged to file a return.
  4. If you spend Rs 2 lakh on international travelIf an individual spent more than Rs 2 lakh on travel to a foreign nation for himself or for anybody else in the previous year, he must file a return.
  5. If your annual electricity bill is Rs 1 lakh If a person spent more than Rs 1 lakh on power consumption in the preceding year, he or she must file a return.
  6. If the gross receipts from a profession exceed Rs 10 lakhIf a person's total gross receipts from his or her profession exceeded Rs 10 lakh in the preceding year, he or she must file a return.
  7. If the total amount of TDS and TCS is Rs 25,000 or moreIf the total amount of tax deducted at source (TDS) and tax collected at source (TCS) in his case during the previous year was Rs 25,000 or more, an individual (under 60 years of age) is required to file his return. In the event of a resident senior person, whose age is 60 years or more at any point during the preceding year, the Rs 25,000 threshold limit is increased to Rs 50,000.
  8. If turnover of your business is more than Rs 60 lakhIf a person's total sales, turnover, or gross receipts for the preceding year exceeded Rs 60 lakh, he or she must file a tax return.
  9. If you have a deposit of Rs 50 lakh or more in a savings bank accountIf an individual's total deposit in one or more savings bank accounts during the previous year was Rs 50 lakh or more, he or she must file a return.

What are the prescribed time limits (Due Dates) for filing ITR?

The due dates for filing Income Tax Return under section 139 (1) of the Income Tax Act for different categories of taxpayers are as under:

Category Due Date of Filing ITR (FY 2021- 22)
Individuals who are not required to be audited
Company or Individual whose accounts are required to be audited
Individual who is required to furnish report referred in section 92E

Who will be covered under the scope of 234F?

All persons including individuals, HUF, Company, Firm, AOP etc. will be covered under the scope of Section 234F of Income Tax Act 1961. All persons will be liable to pay late filing fees when the Income Tax Return is filed after their respective due dates.

What is the amount of fees that can be levied under 234F by the Income Tax?

(A). If your total income is more than 5 Lakhs & return is filed after the due date, Fee = Rs. 5000
(B). If the total income is less than or equal to 5 Lakhs & return is filed after the due date, Fee = Rs.1000.
(C). If the total income does not exceed Rs. 2.5 Lakh, No late filing Fees applicable

Example : A is a super senior citizen. His Gross Total Income for F.Y. 2021-22 is Rs. 4,95,000/-.He is filing a late return. Whether late filing fees be levied?
In the above case, late filing fees u/s 234F shall not be levied since A is a super senior citizen and his GTI does not exceed the basic exemption limit.

Example: 234 F Late Fees Calculation

Let’s understand the quantum of fee that would be payable under section 234 F on the following income and return filing date through an example:

Total Income Return Filing Date Amount of Fees u/s 234F Reason
3,40,000 30/06/2022 NA Return is filed before the due date
2,20,000 31/03/2022 NA Since, income is below 2.5 lakh.
4,00,000 Not filed 1000 Since, income is below 5 lakh.
8,50,000 15/11/2022 5000 Since, income is above 5 lakh.

From which date the provisions of penalty under section 234F shall be effective?

The provisions of penalty under section 234F shall be applicable from 1 April 2018 i.e. in respect of Income Tax returns to be filed for FY 2017-18 (or AY 2018-19). In simple words, if we file the income tax return of F.Y 17-18 after 31st August 2018 then fees u/s 234F shall become operative. Financial year 17-18 was the first year when any such fees would be leviable without the intervention of Assessing Officer. Similarly if return for F.Y. 2019-20is filed after 31st July 2020, then penalty under 234F will be levied.

How to pay 234F Fees?

Challan No. 280
Type of payment - Self assessment (300)
Fill 234 F amount in column "Others".

Challan No. 280

Under which section shall the fees under section 234F will be paid if you have missed the deadline for filing ITR?

The fees u/s 234F shall be payable under section 140A (Self Assessment Tax). A consequential amendment has been made in section 140A to include that in case of delay in furnishing of return of income, along with the tax and interest payable, the fee for delay in furnishing of return of income shall also be payable.

What was the penalty before section 234F was introduced?

Before the introduction of sec 234F, the penalty for failure to furnish the return of income was leviable under section 271F.

As per this section, if the income tax return was not filed before the end of the relevant assessment year then the Assessing Officer, at its discretion may levy a penalty amounting to Rs. 5,000/- However, this section has been withdrawn from the assessment year 2018-19 and onwards after coming of penalty under section 234F into force.

How to avoid paying the fees under section 234F to the Income Tax Department?

In order to avoid payment of late fee u/s 234F, one needs to file the income tax return on time in respect of every assessment year :-) Visit tax2win for hassle free ITR filing.

Can the late fees u/s 234F be waived of in the genuine cases?

No, fees u/s 234F are mandatorily applicable. Therefore, it cannot be waived off by income-tax authority.

Can excess TDS deducted be adjusted from the fees u/s 234F?

Yes, the income tax department will adjust the excess TDS deducted (which you would have received by the way of refund) in the payment of late fees under section 234F.

Will the impact of amendment under section 234F come on the intimation under section 143(1)?

A consequential amendment in section 143(1) has been done in consonance with the introduction of sec 234F. Now, the fee payable under section 234F would also be considered in the computation of the amount payable or refund due, as the case may be, on account of processing of the return.

Is 234F a fee or a penalty?

According to the Income Tax Act, the amount payable under sec 234F is termed as late fees. But,it has been observed that in common parlance, many of us are designating the amount under sec 234F as the penalty instead of fees, which is not the case. The reason is that, this fee is steeper in nature in which the assessing officer has no role in deciding its applicability. It is automatically applied after the due date.

FAQ’s on Section 234F of Income Tax

Q- What is Section 234F as per the Income Tax Act, 1961?

  • As per section 234F of the Income Tax Act where a person is required to mandatorily furnish a return of income under section 139, fails to do so by the due date, attracts levy of late fee under this section to the amount of
    1. Rs 5,000/-, if the return is furnished on or before the 31st day of December of the assessment year;
  • In case the total income of the taxpayer does not exceed Rs 5,00,000/- then, the late fee payable shall not exceed Rs 1,000/- in any circumstances.
  • Section 234F will apply for ITRs of F.Y 2017-18 (AY 2018-19) and onwards. That means if a return of F.Y 2020-21 is filed after 31st July 2022 then you have to pay late fees.

Q- If I don't file my Income Tax Return after paying all the due taxes then what would be the consequences?

Even after the payment of taxes if you don’t file your IT returns then the IT department may issue a notice of non-compliance after the end of relevant assessment year and late filing fees will be levied u/s 234F.

Q- My income is 4,50,000 and if I file my return after the due date(i.e. 31st July); then what would be the amount of fees u/s 234F which has to be paid at that time?

As per section 234F the amount of fee u/s 234F shall be Rs.1000 where income is below Rs. 5,00,000.
Hence, in your case, the quantum of fees/penalty shall be Rs. 1000 if you file it after July 31st.

Q- Is it possible to file the return for F.Y 20-21 after 31st March 2022 by paying the late fees of Rs.10,000 u/s 234F?

No, it is not possible to file the income tax return now for FY 2020-21.

Q- If I have filed the Return but not e-verified will the penalty under section 234F would be levied?

Yes, not verifying the ITR is deemed as you have not filed your ITR and if you have not filed your ITR within the deadline, you shall be liable to pay the penalty as per your salary slab.

Q- I have income from salary only, and the TDS is done by my employer. Will I still have to pay late fees under 234F?

Yes, fee under section 234F shall be levied if TDS has been deducted by your employer and your salary is more than the basic exemption limit.

Q- I am a retired person, have income from Bank Fixed Deposit only. TDS has already been deducted by the bank. Do I still need to pay a fee under section 234F?

Yes, fee under section 234F shall be levied even if TDS has been deducted by the bank and your total income is more than the basic exemption limit.

Q- My income is Rs. 350,000 and I am availing deduction u/s 80C of amounting Rs. 1,50,000. So, my income after deduction comes to Rs. 2,00,000 then whether section 234 F of income tax act 1961 will still be leviable in my case?

Yes, penalty under Section 234F would be leviable in your case. In your case, you are required to file ITR as per law because your income before deductions is above the basic exemption limit. Therefore, if you file the belated return then sec 234F shall be applicable. Late Fees of Rs. 1000 shall be applicable in your case.

Q- If my income is below Rs. 2,50,000 and I am filing a return voluntarily after the due date, Do I need to pay the late fee?

No, fees u/s 234F shall not be applicable in your case as your income is below exemption limit.

Q- I am filing a belated income tax return then whether interest u/s 234A will also be levied along with payment of fees u/s 234F?

Yes, both will be applicable simultaneously in a situation when your tax is payable. However, in case of late filing of return when no tax is payable then interest under sec 234 A shall not be levied and only late fee u/s 234F shall be leviable.

Just don’t get confused in both of these sections. Sec 234A speaks for levy of interest at the rate of 1% on the tax amount due while section 234F talks about the levy of a definite amount of late fees depending on the date of filing of the return. Therefore, both will be applicable in case of delay in filing of return u/s 139(1) if your tax is unpaid.

Q- What will happen in case my total Income exceeds Rs. 5,00,000 and I have filed the return after the due date with the applicable fees?

In this case, after the e-verification of return, it would be processed by the income tax department as per the normal provisions of the income tax law.

Q- Is there an exemption for the senior citizen from the fees under section 234F?

No, there is no such exemption of penalty under section 234F. The conditions of levy and the quantum of fees remain the same in case of every individual including super senior citizen.

Q- What is the applicability ofSection 234F?

Section 234F becomes applicable to an assessee when he/she is compulsorily required to file an income tax return & files income tax return after 31st July, 2019.

Q- What is the difference between Sec 234F & Sec 234E of Income Tax Act?

Section 234E levies late fees on delay in submitting TDS return after the relevant due dates. While on the other hand, Sec 234F levies late fees on filing income tax return after 31st July, 2022 .

Q- What is Section 139 of Income Tax Act 1961?

Section 139 of the Income Tax Act 1961 defines different types of the income tax returns which can be filed by various assessees. Like mandatory/ voluntary return u/s 139(1), loss return u/s 139(3), belated return u/s 139(4), revised return u/s 139(5), income tax return of a charity or religious institution u/s 139(4A) etc.

Q- What is Section 271F of Income Tax Act?

Section 271F imposes a penalty on failure to furnish income tax return till the end of relevant AY at the discretion of the assessing officer. But, from 1st April, 2017 Section 271F has been abolished & new late filing fee under Section 234F has been introduced.

Q- What is Section 234D of the Income Tax Act?

Section 234D levies interest on the excess amount of refund given to the assessee. When a refund is given to an assessee as per Sec 143(1) & it is found that either refund was not due or an excess refund has been given, then on the excess tax refund, an interest @ 0.5% per month is to be paid.

Q- What is interest u/s 234A?

Section 234A levy interest on delay in filing of income tax return @ 1% per month. You can read more about Sec 234A, Sec 234B & Sec 234C in our blog.

Q- What are the charges for filing income tax return?

Income tax returns can be filed FREE of cost by the assessee by making self-assessment. In case, any consultation is needed for tax saving & planning then consultation charges are required to be paid.

CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.