Income Tax Return: Missing July 31 deadline means you would not be able to file your return later under the old tax regime since new tax regime is the default regime for financial year 2023-24.
The deadline to file income tax return (ITR) for financial year 2023-24 is July 31. It is a well-known fact but what most taxpayers are not aware is that the deadline is highly unlikely to be extended. If you recall, a similar situation happened last year. A large number of taxpayers were hoping for the deadline to get extended as a convention.
But at the eleventh hour, they faced a rude shock that the deadline was NOT going to be extended.
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Situation is not too distinct this time around. While there is a chatter, and some demands that the deadline to file income tax return may (or should) get extended, it is perhaps as unlikely and uncertain as the roll-back of revision of provision of capital gains tax.
Let us understand what do you stand to lose if you fail to file income tax return before July 31.
1. Losing out on exemptions given in old tax regime: When you miss the July 31 deadline, you would not be able to file your return after this date under the old tax regime because for financial year 2023-24, new tax regime is the default regime. This effectively means you will not be able to avail exemptions and deductions against investments in tax-saving instruments.
After July 31 deadline, taxpayers will not be able to claim these benefits since they will be shifted to the new tax regime wherein these benefits are absent.
Chartered Accountant explained this in an X post wherein he says, “missing the deadline could lead to the forfeiture of benefits tied to the old tax regime, as taxpayers will automatically be shifted to the new tax regime—this being the default option. This shift could make the situation more costly, as taxpayers who preferred the old tax regime for its deductions and exemptions will find that the new regime does not offer these benefits and may have to pay higher taxes with interest.”
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“For salaried taxpayers with no business income, who have opted for Old Tax Regime, have to file the ITR before the due date. Else they will not be able to opt out of the default New Tax Regime,” says Chartered Accountant Pratibha Goyal, partner, PD Gupta & Company, a Delhi-based firm.
2. Late filing fee: As we are aware that missing July 31 deadline for filing ITR means the income tax department can impose a late filing fee of ₹5,000 under Section 234F of the Income Tax (I-T) Act. However, the late filing fee is slashed to ₹1,000 if your income is below ₹5 lakh.
Besides, if there is a tax liability, taxpayers are made to pay interest at a rate of 1 percent per month as per Section 234A of the Income Tax Act on the outstanding tax amount from the due date.
3. No carry forward of loss: If taxpayers happened to incur losses because of their investment in stock market, mutual funds, properties or any of their businesses, they have the option to carry forward these losses and offset them against income in the subsequent years.
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This provision substantially reduces your tax liability in future years. However, this is not permitted when you file your return after the deadline.
“You will not be allowed to carry forward these losses if you miss filing your ITR before the deadline,” adds chartered accountant Chauhan.
