DO YOU KNOW THE BENEFITS THAT ARE LOST FOR NOT FILING ITR BEFORE THE EXPIRY OF DEADLINE?

 The deadline for filing Income Tax Return (ITR) for the FY 2021-22 will lapse on July 31. This deadline is applicable for individuals whose accounts are not required to be audited. The Government has clarified that no further extension is given to individuals for FY 2021-22 (AY 2022-23).

Following consequences and inconveniences are attached if an individual fails to file ITR by the deadline.

1. You will have to pay up to Rs.5000/- for the belated filing of the IT return. Earlier, the maximum penalty for filing the belated ITR was Rs.10, 000. It was reduced by half by finance minister Nirmala Sitharaman in her Budget 2021 speech. There is a relief given to small taxpayers — the IT department has stated that with effect from FY 2020-21, if the total income does not exceed Rs.5 lakh, the maximum penalty levied for delay will be Rs.1000/-. The late filing fee is levied under section 234F of the Income-tax Act, 1961. This late filing fee must be paid before the belated ITR is filed.
2. If you file a belated ITR, you cannot carry forward the income from other sources, capital gain, business, and speculation losses to the next years to set off against income in future years. You can only adjust the losses from the sale of house property.
3. In case you’re entitled to receiving a refund from the government for excess taxes you have paid, the tax refund is only paid if the return is filed and duly verified.
4. On the timely filing of the ITR, the person is eligible to get an interest of 0.5 per cent per month on the refund amount. However, no such benefit is given in the case of a belated ITR.
5. An individual is liable to pay penal interest if there are any tax dues pending at the time of filing belated ITR. Penal interest is levied under sections 234A, 234B, and 234C, which are as under.
6. Under section 234A penal interest is levied if an individual fails to deposit self-assessment tax before July 31.
7. Under section 234B penal interest is levied if an individual fails to deposit 90% of the advance tax before March 31 of the financial year.
8. Under section 234C penal interest is levied if an individual has not made an advance tax payment during the previous financial year.

The penal interest under all three sections is levied at 1% per month on the tax amount dues.

Important: Individual taxpayers should note that there is a deadline for filing belated ITR. If you have missed the date to file ITR, i.e., July 31, 2022, for FY 2021-22, then you must file the belated ITR on or before December 31, 2022. If you miss the December 31, 2022, deadline, then you will not be able to file ITR unless the income tax department sends the notice for filing the same.