Taxpayers who fail to file their ITR within the prescribed due date can utilize the provisions of Section 139(4) of the Income Tax Act, 1961 to file a belated return.
Question: I am a trader dealing in steel products, and due to business-related challenges, I was unable to file my return of income for the Assessment Year 2024-25 before 31st July 2024. Please note that there is no tax audit applicability in my case. Is there a provision to file the return subsequently? Additionally, kindly provide details regarding any penalties or other consequences that may arise due to the delay.
Response given by CA (Dr.) Suresh Surana:
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* Time limit for filing Belated Return u/s 139(4)
Taxpayers who fail to file their income tax return (ITR) within the prescribed due date can utilize the provisions of Section 139(4) of the Income Tax Act, 1961 (“IT Act”) to file a belated return. For individual taxpayers (not subject to Audit), the due date for filing the ITR for the financial year 2023-24 is 31st July 2024. If this deadline is missed, the belated return can still be filed, but only until three months before the end of the relevant assessment year, i.e., by 31st December 2024, or before the completion of the assessment, whichever is earlier.
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* Penalties for Late Filing
Taxpayers should be aware that filing an ITR beyond the due date incurs penalties under Section 234F of the IT Act as follows:
a) If the taxpayer’s total taxable income exceeds Rs. 5,00,000, a late filing fee of Rs 5,000 will be levied.
b) If the taxpayer’s total taxable income is upto Rs 5,00,000, a reduced late filing fee of Rs 1,000 applies.
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* Interest Consequences
Late filing of the ITR may also result in the taxpayer incurring interest liabilities under various provisions of the IT Act:
a) Interest under Section 234A:- This applies when the taxpayer does not furnish the return within the stipulated due date under Section 139(1). Accordingly, the taxpayer is liable to pay simple interest at 1% per month or part thereof on the unpaid tax amount from the original due date of the return until the date of actual filing.
b) Interest under Section 234B:- Interest (Simple interest) at the rate of 1% per month or part thereof is charged on the unpaid amount when the taxpayer has not paid 90% or more of the assessed tax liability by the end of the financial year. Simple interest.
c) Interest under Section 234C:- Interest under this section is triggered by the deferment of advance tax payments during the financial year. The taxpayer must pay simple interest at 1% per month or part thereof on the shortfall amount in each installment of advance tax.
In this case since the assessee has missed the tax filing deadline, he may still file a belated income tax return. However, he may be subjected to the aforementioned penalties and interest (if any) for the delay.
