Missed the tax deadline? You can still file late with few consequences

Belated ITR filing: Missed the deadline for filing your income tax return? There's no need to stress, filing a belated return is still an option, though it comes with certain penalties.

Belated filing breakdown

A belated return refers to a tax return filed after the original due date of July 31st but before December 31st of the assessment year. While there are penalties for late filing, it is still better than facing potential consequences for non-compliance.

For the Financial Year 2023-24, the deadline to file your return was July 31, 2024. If you missed this date, you can still file a belated return by December 31, 2024. If you miss this secondary deadline, you may file an ITR-U under specific conditions.

Following amendments in the Finance Act 2021, the timeline for filing a belated return has been reduced. You can now file it up to three months before the end of the assessment year or before the completion of the assessment, whichever comes first.

Cost of delayed returns

Filing your income tax return late can result in several significant drawbacks. First, interest penalties may be imposed under Sections 234A, 234B, and 234C, adding additional costs to your tax obligations.

Moreover, a late fee is applicable under Section 234F, which varies based on income levels: if your income is up to Rs 5 lakh, the fee is Rs 1,000; for income exceeding Rs 5 lakh, the fee increases to Rs 5,000.

This means that the financial burden increases with the level of income, making timely filing crucial to avoid higher costs.

Additionally, if you file late, you forfeit the ability to carry forward or set off business and capital losses in future years. This can impact your tax planning and financial management, as such losses could have provided valuable relief.

However, there is an exception for losses from house property, which can still be carried forward even if the return is filed late.

Furthermore, filing your return after the deadline results in the disallowance of certain deductions and exemptions, specifically those under Sections 10A, 10B, 80-IA, 80-IB, 80-IC, 80-ID, and 80-IE.

These tax-saving benefits are available only if the return is filed before the original due date, meaning that late filers miss out on potential tax reductions.

Overall, late filing not only incurs financial penalties but also forfeits important tax benefits and planning opportunities.

How to file belated returns?

Online method

• Log in to your e-filing account.
• Navigate to ‘e-File,’ then select ‘Income Tax Returns,’ and on ‘File Income Tax Return.’
• Choose the relevant assessment year.
• If opting for online filing, follow these steps:
    - ‘Start new filing.’
    -Select the applicable status for a belated return.
    -Choose the correct ITR form.
    -Verify and update your personal information.
    -In the filing section, select Section 139(4).
    -Enter your income details and proceed with the tax payment.

Offline method

• Download the Offline ITR Preparation Utility and complete the ITR.
• Upload the .json file and proceed with verification.

If you receive a notice for late payment, promptly respond by addressing any penalties or additional taxes due. Ensure all information is accurate and follow up as required.