Income tax filing FY 2024-25: Common delays, penalties, and how to avoid them

Many taxpayers delay and put off filing their income tax returns (ITRs) until the last moment. This leads to delay in refunds, avoidable stress and possibility of financial penalties. Even though over the years the process of income tax filing has become simpler, procrastination continues to complicate the process for taxpayers.

Here is why delays take place and how you can avoid them this year i.e., while filing the tax returns for the financial year (FY) 2024-25.

Why delays happen

Taxpayers generally wait for the official release of updated ITR forms along with filing utilities. This usually comes after the previous financial year has ended. Important documents such as Form 16, Form 16A, annual information statements (AIS) are generally available only after mid June. In such a case, filing of tax returns before receiving the complete set of documents may result in data mismatches and incorrect income tax return calculations.

Confusion around the default tax regime along with recent updates on the income tax portal have also made many salaried and first time income tax filers hesitant to start early. The income tax submission deadline has also been extended to September 15, 2025 to help taxpayers in filing taxes in a timely manner.

The mindset behind procrastination

Therefore, delays are not just due to technical difficulties. Many taxpayers feel overwhelmed and confused by the paperwork along with the fear of making submission mistakes. There’s also a tendency to assume that there is always more time, until the deadline comes extremely close causing more stress.

CA Ruchika Bhagat, MD, Neeraj Bhagat & Co., explains, “Tax filing often takes a backseat due to fear of errors or the mental block associated with finances. People delay it thinking there’s always more time, only to panic near the deadline. The solution lies in setting a specific date, breaking the task into smaller steps, and treating filing as a financial responsibility, not a burden.”

Simple steps to file early for FY 2024-25

1. Set a tax filing reminder: Once you have accumulated all the relevant documents from the official portals such as Form 16, Form 16A, annual information statement (AIS) post the same you should set a tax filing reminder. Set a target of one week or fifteen days within which you will compile and submit your income tax returns.
2. Gather all tax documents early: This includes salary slips, rent receipts, bank interest proofs, Form 16 and investment details along with other similar relevant documents. This will help you in making your tax filing more smooth and seamless.
3. Check Form 26AS and AIS online: To verify income and tax deposited at source (TDS) details match your records as provided on the income tax portal. If required write your entire tax calculation down on a sheet of paper.
4. Compare old vs new tax regimes: To choose the one that gives you the best tax savings. For this you can also take professional guidance after discussing your individual case with a certified Chartered Accountant.
    
5. Use trusted e-filing platforms: There are several prominent e-filing platforms that you can reach out to and file your tax in seamless fashion. You can also consult a CA for accurate and stress-free tax filing.

Why early filing pays off

The objective behind filing taxes early is to try and ensure that you receive refunds faster. Sometimes within two to three weeks. Filing on time also helps in avoiding late fees, unwanted errors and brings clarity and peace of mind. Most importantly it permits you to focus on planning your finances for the rest of the year in an efficient manner.

Penalty for late filing of ITR

If you miss the ITR deadline for FY 2024-25 i.e., September 15, 2025, then the income tax department may levy a penalty under Section 234F based on your income level.

Current status of section 234F penalties for FY 2024‑25/AY 2025‑26

Note: The above table is illustrative in nature and is open to change and amendments as per the provisions of the income tax act. For personalised legal or tax advice, please consult a qualified tax advisor or lawyer.

Therefore, to ensure that you save yourself from the hassle of paying late fines, fees and filing complicated forms it is important for you to take proactive steps and ensure that your income tax return is filed within the stipulated time.

Disclaimer: This article is for general information purposes only and should not be considered as professional tax advice. For personalised guidance, please consult a certified Chartered Accountant or a qualified tax advisor.