5 Major consequences for late filing of Income Tax return after the due date of 31 July

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Hello Dear Readers,

We are Sharing With You Five Major consequences for late filing of Income Tax return after the due date of 31 July

CA STUDY NOTES

Five Consequences for late filing of Income Tax return after the due date of 31 July :

1) Penalty:

The maximum penalty of Rs 5000 is levied if you file your ITR after the due date i.e. after 31st July and before 31st December. However there is a relief for small taxpayers, If their total income does not exceed Rs 5 Lakh, the minimum penalty levied for delay will be Rs 1000.

2) Interest on Unpaid Taxes:

Apart from the Penalty, interest will be charged under Section 234A at 1% per month or part thereof on tax due until the payment of taxes.
It is important to note that you cannot file ITR unless you pay taxes. The interest calculation under the said section will start from the date falling immediately after the due date.

3) Unable to Set Off losses:

Losses incurred are not allowed to be carried forward to subsequent years. You cannot set off these losses against future gains if the return has not been filed within the due date. However, if there are any losses under House Property, carry forward is permitted

4) Delayed Refunds:

In case you’re entitled to receive a refund from the government for excess taxes paid, you must file the returns before the due date to receive your refund at the earliest.

5) Prosecution & Imprisonment:

If a taxpayer fails to file their income tax return, they will receive a notice from the Income Tax Department under Section 142(1), 148, or 153A. Failure to file even after receiving these notices can result in prosecution under Section 276CC of the Income Tax Act for tax evasion. The penalties for tax evasion exceeding ₹25 lakh include a penalty for not filing an ITR and imprisonment of at least 6 months, which may extend to 7 years. For other cases, the prescribed penalty is imposed along with imprisonment of at least 3 months, which can be extended up to two years.

It’s always better not to wait for the last day to file Tax Returns as Income Tax Portal works slowly due to heavy traffic. Last year 72 lakhs returns were filed on the last day i.e. 31 July. Let us see if the record is broken and it may cross 1 crore this year.

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