The taxpayers for whom the tax audit is not required have to file the income tax return of their income earned during the period of 1st April 2020 to 31st March 2021 on or before 31st July 2022 unless extended.
Let’s discuss the implications of the late filing of Income Tax Return:
Unable to set off Losses – Income Tax Return
Losses incurred (other than house property loss) are not allowed to be carried forward in subsequent years. You cannot set off these losses against future gains if the return has not been filed within the due date. However, if there are losses under house property, carry forward of losses is permitted.
Interest on the delay of filing a return
If the taxpayer fails to file the ITR by the due date, then under section 234A penalty interest at the rate of 1% per month or part thereof is levied on the outstanding tax until the payment of tax.
Late filing fees u/s 234F
A late filing fee is applicable for filing your returns after the due date under Section 234F. The maximum penalty of Rs 5,000 will be levied if you file your ITR after the due date. However, there is a relief given to small taxpayers–if their total income does not exceed Rs 5 lakh, the maximum penalty levied for delay will be Rs 1000.
Delayed Refunds
If one is entitled to receive a refund from the government for excess taxes paid, he/she must file the returns before the due date to receive the refund at the earliest.
Prosecution–As per Section 276 CC
As per Section 276 CC, the income tax officer can initiate proceedings for prosecution if the person willfully fails to file a return, even after issuing notices. The imprisonment can be for a term of three months to two years with a fine. If the tax you owe to the income tax department is higher, the prosecution period may extend to seven years.
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