What happens if you miss Income Tax Return deadline
The deadline to file your Income Tax Returns (ITR) for 2023 is today, July 31. Some taxpayers have already taken care of their filings, while others are still in the process. Most tax experts and chartered accountants are suggesting that the government is not extending the deadline this year. If you haven't filed your returns yet, it's time to act swiftly to avoid penalties.
6 crore ITRs filed as of July 30, 6:30 pm
By July 30, over six crore ITRs have been filed, including around 26.76 lakh ITRs filed on July 30 alone until 6:30 pm. This figure has already surpassed the total number of ITRs filed until July 31 of the previous year, setting a new milestone.
What happens if you miss the deadline?
Missing the July 31 deadline for filing ITRs isn't the end of the world. You can still file them later, but there are penalties. The process is known as "belated ITRs," and the last date for filing a belated ITR for FY 2022-23 (AY 2023-24) is December 31, 2023. It will attract penalties under Section 234F of the Income Tax Act, 1961.
How much is the penalty?
The penalty can be up to Rs. 5,000 for most individuals, while small taxpayers with an income below Rs. 5 lakh may pay Rs. 1,000. Besides the late fee, any tax amount due will also incur penal interest until it's paid. The interest rate is 1% per month, starting immediately from the day after July 31 until the actual date of filing the return.
Loss of refund interest
When you file your ITR, you can claim a refund for the excess taxes deducted. If filed within July 31, you gain interest on the refund at 0.5% per month, calculated from April 1 until the refund date. However, if filed after July 31, the interest will be computed from the date of filing to the refund date, excluding the period from April 1.
Loss carry forward
If you fail to file the income tax return for the year in which a loss is incurred within the due date, you cannot carry forward the loss to future years. However, if the loss is under the head of house property, you can still carry it forward even if the return is filed after the due date.
The bottom line
Filing your taxes on time helps the government assess its revenue and formulate effective fiscal policies. It also saves you from unnecessary stress and last-minute rushes to gather financial documents. If you are unsure about any part of the ITR filing process, consult with a tax professional. So, act swiftly and file your ITR on time to avoid any trouble and unnecessary headaches.
