Why you should file your ITR within the deadline

You must meet the deadline for filing your Income Tax Return (ITR) to avoid a penalty, and you must verify the filed return within 30 days, else your ITR will be invalid. Although you can file a belated return after the deadline, there are important aspects you should be aware of before taking advantage of this final opportunity. Due to amendments in the Finance Act of 2017, filing a belated return can have significant financial implications. 

The deadline for filing ITR for FY 2022-23 is July 31, 2023. If you miss filing your ITR for the current FY, here are the effects you may have to bear : 

Late fees

In such a case, failing to file the ITR within the deadline would result in a late filing fee of Rs 5,000 per section 234F. However, if the taxpayer’s total income is up to Rs 5 lakh, the late fee will be limited to Rs 1,000.

Interest implied

Additionally, the taxpayer would be liable to pay interest under section 234A at a rate of 1% per month or part of the month for any unpaid amount of tax.

Losing specific benefits 

Due to the non-filing of the tax return within the prescribed due dates, the taxpayer would be ineligible to claim certain deductions and/or set off and carry forward losses, except for the loss from house property.

Additional penalty

If a taxpayer fails to file the tax return, the income tax authorities may perceive it as an attempt to evade taxes. They possess the authority to impose penalties under section 270A for under-reporting income. The penalty amount can be as high as 50% of the tax that was avoided due to the non-filing of the return. 

Additionally, the authorities can initiate prosecution under section 276CC against the taxpayer. In such cases, the taxpayer may face imprisonment for a period ranging from a minimum of 3 months to a maximum of two years, along with fines. The severity of the punishment depends on the extent of tax evasion, as determined by the authorities.

Your ITR may become invalid 

Several consequences will occur if you fail to verify your filed ITR within 30 days of filing it. Firstly, the income tax department will not consider your tax return as valid. Moreover, your unverified ITR will not undergo processing by the tax department. Additionally, if you have claimed a tax refund, it will not be issued to you unless you have filed a verified ITR and the income tax department has confirmed its processing. It is crucial to complete the verification process within the specified timeframe to ensure the validity and processing of your tax return.

For any clarifications/feedback on the topic, please contact the writer at samiksha.swayambhu@clear.in