Every taxpayer is required to file an annual income tax return (ITR). For the financial year 2023-24, the deadline to file your ITR is July 31st.
It is crucial to meet this deadline, as failing to do so will result in a penalty set by the Income Tax Department.
If you miss the due date, you will incur a penalty. To avoid this, ensure you file your ITR on time.
If you need to file after the deadline, follow these steps to complete the process and understand the associated penalties.
How will the loss occur?
There will be two types of penalties for not filing the return by 31 July.
First, according to Section 234A of the Income Tax Act, the taxpayer will have to pay interest at the rate of 1 percent every month on his tax amount.
The interest will be calculated from the date the taxpayer files the return.
Additionally, if the return is not filed by July 31, taxpayers may have trouble receiving their refund money.
Additionally, if the taxpayer does not pay their tax on time, they may face challenges in securing a home loan or any other loan,
as banks and NBFCs require ITR details from applicants..
How much will the penalty be?
Income tax rules allow taxpayers who miss the due date to file a belated return. They can submit this return until December 31 of the same year.
After the July 31 deadline, a late fee will be charged for filing a belated return.
The penalty amount depends on the taxpayer’s annual income.
For example, if a taxpayer’s annual income is Rs 5 lakh or less, they will have to pay a penalty of Rs 1,000 for filing a belated return.
If a taxpayer’s annual income exceeds Rs 5 lakh, they will need to pay a penalty of Rs 5,000.
Additionally, the taxpayer will also have to pay interest on the unpaid tax amount.
