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Business News/ News / India/  ITR filing: What happens if you fail to file income tax returns by July 31?
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ITR filing: What happens if you fail to file income tax returns by July 31?

Mistakes made at the last minute and issues with ITR e-filing websites happen frequently.

ITR filing: What will happen if you fail to file income tax returns by July 31?Premium
ITR filing: What will happen if you fail to file income tax returns by July 31?

The deadline for filing income tax returns (ITR) is July 31 of the applicable assessment year (AY) for all assesses other than businesses, individuals whose accounts must be examined and a few additional individuals. So, the deadline for filing ITRs for the fiscal year 2021–2022 (FY2022) —which includes revenue from small enterprises, professions, and salaries—is July 31, 2022.

Mistakes made at the last minute and issues with e-filing websites happen frequently. It is suggested to file the returns in advance because of this. Additionally, if the income-tax portal experiences any delays, one risks missing the deadline. You could submit your tax returns after the deadline, but interest and penalties will then apply.

Even though the ITR filing deadline is July 31, returns can still be submitted until December 31 of the assessment year (AY2023 this time). However, this is known as a belated return. Along with the interest, there are penalties that must be paid.

Belated returns may be submitted at any time, as long as it's three months or more before the assessment year ends or the assessment process is finished, whichever comes first. Up until December 31, 2022, or three months before the AY2023 finishes on March 31st, 2023, a delayed return for 2021–22 may be submitted.

What happens when you file belated return

ITRs cannot be voluntarily filed after December 31 of the assessment year. After that, the income-tax department will inform you of what has to be done if and when it picks up your income tax details that are available for inspection.

If the total amount of income that must be reported exceeds Rs. 5 lakh, a penalty of Rs. 5,000 will be assessed for the late submission of forms. The cost is up to 1,000 if the person's total annual income is less than 5 lakh.

Additionally, you are subject to a fine for the same. In accordance with Section 234C, if you don't pay your advance taxes on time, you must pay a 1% penalty on the amount of income taxes owed until you pay them off or until the end of the fiscal year.

You must pay 1% interest on your tax obligations every month or a portion of a month, as per Section 234b, based on when you file your tax returns between April 1 and July 31 of the assessment year. Starting in August, you will be subject to a monthly interest charge of 2% on any unpaid taxes until you pay the unpaid tax and file the return.

The drawbacks of filing a late return go beyond the penalty and interest. Losses cannot be carried over when filing a belated return. This effectively means that no loss under the head ‘capital gain’ or ‘business and profession’ can be carried forward or set off from succeeding years if you do not file returns on time. Further, in case an assessee fails to file the belated return, then a taxpayer can receive a notice of inquiry.

The Income Tax Department has reported to have received more than two crore ITRs for AY 2022-23. “We urge you to file your ITR at the earliest, if not filed as yet," it said on Twitter.

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Published: 21 Jul 2022, 03:35 PM IST
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