Income Tax Return Filing: The last date for filing Income Tax Return (ITR) for the financial year 2023-24 (Assessment Year 2024-25) is 31st July 2024. But it is not that the return for the financial year 2023-24 will not be filed after the deadline.
It can still be filed but it will be a belated ITR, with which a penalty of up to Rs 5000 will have to be paid. Also, interest may have to be paid. The last date for filing belated ITR is 31st December 2024.
Under section 234F of the Income Tax Act, those with gross total income up to Rs 5 lakh will have to pay a penalty of Rs 1000 for belated ITR and those with income more than Rs 5 lakh will have to pay a penalty of Rs 5000. Interest may be charged under sections 234A, 234B and 234C. Remember that belated returns cannot be revised.
Belated ITR will be filed only under the new tax system
Also remember that from August 1, 2024, while filing belated ITR for the financial year 2023-24, taxpayers cannot choose the old tax regime. It can be filed only under the new tax regime. The reason for this is that under the current income tax laws, the new income tax regime has now become the default tax regime. Default tax regime means that if a taxpayer does not choose between the old and new tax regime in any financial year, then it will automatically be assumed that he has chosen the new tax regime.
Those filing belated ITR for FY 2023-24 will not be able to claim deductions and exemptions available under the old tax regime, which are not allowed with the new tax regime. Apart from this, another disadvantage of belated ITR is that if the taxpayer has incurred losses such as business-related and capital losses, then they cannot be carried forward or adjusted in subsequent years. However, loss from house property is an exception and can be carried forward even if the return is being filed late.
Which taxpayers are exempted from penalty even if they have belated ITR?
There is also a category of taxpayers who have the opportunity to file ITR even after the deadline without any penalty or late fee. These are the people who are filing zero returns, that is, whose total income, under the tax system chosen by them, falls within the basic exemption limit without claiming any deduction.
At present, there are two types of income tax systems in the country. In the new tax system, the basic exemption limit is Rs 3 lakh for people of all ages. Whereas in the old tax system, the basic exemption limit is Rs 2.5 lakh for people below 60 years of age, Rs 3 lakh for 60-80 years and Rs 5 lakh for people above 80 years of age. Some conditions apply for exemption from penalty in belated ITR. If a taxpayer with these conditions misses the deadline for filing ITR, then he also has to pay penalty on belated ITR like other taxpayers. These conditions are…
Has deposited an amount of Rs 1 crore or more in one or more accounts in any bank / co-operative bank
Have paid electricity bills of Rs 1 lakh or more in any year
Spent Rs 2 lakh or more on travel abroad for self or someone else
Own foreign assets such as stocks in a non-Indian company
What if we miss the December deadline as well?
If the taxpayer does not file belated ITR for the financial year 2023-24 even by the December deadline, then he can file ITR-U i.e. updated return in some specific cases. In this, 25-50% additional tax will have to be paid on the tax due amount along with penalty and interest. Filing updated ITR under the new income tax system may result in paying more tax than filing belated ITR.
Under the Income Tax Act, if the taxpayer’s tax liability exceeds Rs 25,000, he can be punished with rigorous imprisonment for a term of at least six months and a maximum of 7 years. He may also have to pay a fine. For tax liabilities less than Rs 25,000, the punishment includes rigorous imprisonment for a term of at least 3 months and a maximum of 2 years and a fine.
