The last date for filing an Income Tax Return (ITR), July 31, for the Financial Year 2023-24, has passed. As the Income Tax Department (IT Department) did not extend the deadline, income taxpayers who missed the ITR deadline are required to pay extra amounts as penalties while filing a belated return until December 31, 2024.
Failure to file ITRs on time may result in penalties and fines and attract audits from the IT department. An income tax return (ITR) filed after the deadline of July 31 is called a belated return, as per section 139 (4) of the Income Tax Act.
Taxpayers have to pay penalties for filing their ITR based on their income level.
-Taxpayers with net taxable income above ₹5 lakhs for FY24 can file a belated tax return penalty of up to ₹5,000.
Whereas, for the people, whose net taxable income is below ₹5 lakhs for the financial year (FY24), penalty on belated ITR is limited to ₹1,000.
In addition to facing penalties on belated ITR filing, income taxpayers also end up getting certain advantages and privileges that they used to have before the deadline. Following are the two major disadvantages (apart from penalties) for individuals filing belated ITR.
-New Tax regime: Income taxpayers have the option to file taxes based on new and old tax regimes; however, failing to file ITR within the deadline deprives individuals of the freedom of choosing their regime as they are automatically shifted to the new tax regime. Unlike old tax regime, new tax regime lacks deductions and also offers limited exemptions.
Carry forward of losses: Filing ITR after the deadline doesn't let individuals carry forward their losses incurred from investment tools like stocks, mutual funds, properties, etc. Therefore, they are subjected to higher taxes in the future.
Individuals whose taxable income is below the basic exemption limit can file the ITR to claim a refund, as they are exempt from penalties for late filing.
