What happens if you miss deadline to file tax returns
The final day to file the income tax returns (ITR) for the financial year 2023-24 is Wednesday, that is July 31. Despite rumors of a possible extension, officials have not signaled any intention to push back the deadline. As of July 26, five crore people have already submitted their returns— an 8% increase from last year.
Penalties for late filing of ITR
Missing the July 31 deadline does not prohibit individuals from filing their returns, but it does come with penalties. Those who file a belated return by December 31, 2024, will face a late fee penalty under Section 234F of the Income Tax Act, 1961. This penalty can be as high as ₹5,000 or limited to ₹1,000 for small taxpayers whose income doesn't exceed ₹5 lakh.
Other consequences
In addition to late fees, individuals will also owe interest on any unpaid taxes from the original due date until the full amount is paid. Filing a belated ITR has other drawbacks such as not being able to carry forward losses from capital gains and business income. However, losses from house property can still be carried forward even with a belated filing.
Late filers lose option to choose tax regime
Late filers also forfeit the option of choosing between the new tax and old tax regime. This could potentially increase tax liability for those with higher income and higher deductions who would have benefited from the old tax regime. The process for filing a belated ITR is similar to regular filing but requires selecting section 139(4) instead of 139(1) on the form.
No deadline extension despite technical glitches
Despite complaints of technical glitches on the income tax website and requests for a deadline extension by various tax consultants and associations, officials have stated that there are no plans to extend the deadline. They are working with service providers Infosys, IBM, and Hitachi to resolve issues on the e-filing portal. Filing taxes at the last minute can lead to errors and missed disclosures.
What happenes if you chose old tax regime
Missing the deadline can have significant consequences for taxpayers who opted for the old tax regime at the beginning of the financial year. Belated tax returns are filed under the new tax regime by default, which means taxpayers will have to forfeit any deductions and exemptions they intended to claim. This year, ITR utilities are seeking more disclosures from taxpayers with any disability or dependents who are disabled, donations, capital gains account scheme (CGAS), online gaming, and old bank accounts.
