What Happens If You’re Late In Filing Income Tax Returns

The last day of filing income tax returns is 31 December 2020. The Central Board of Direct Taxes (CBDT) has extended the date twice, but it is important to file your income tax returns before the deadline. If you miss the deadline, you can still file it, but you will have to face consequences in the form of fines or loss of tax benefits. You may also remember that if your salary falls below net income, you will not be asked to pay any penalty for filing a late or belated return.

As per the income tax regulations, the minimum exemption limit for persons below the age of 60 is Rs 2.5 lakh. For individuals or senior citizens 60 years of age or above but under 80 years of age, the tax exemption cap is Rs. 3 lakh. For people above 80 years of age and above the basic exemption limit is Rs 5 lakh.

If a taxpayer files a delayed ITR, i.e. after the due date, the returns filed are considered belated returns.

Penalties which you need to pay in case of late filing of returns.
penalty late filing itr
  • A penalty of Rs.5,000 shall be imposed on taxpayers if they skip the filing date for the relevant assessment year and file their returns on or before 31 December 2020. This year as a result of the Covid-19 outbreak, the government has extended the deadline to 31 December 2020 so that this penalty does not apply to FY2019-20.
  • A penalty of Rs. 10,000 will be imposed if you file your income tax returns after 31 December 2020 and before the end of the relevant assessment year, which is 31 March 2021.
  • The penalty is Rs. 1000 for small taxpayers with taxable income less than Rs. 5 lakh for late filings.
  • In addition to penalties, late filing of income tax returns would attract 1 percent of interest on any tax paid due in the financial year according to Section 234A of the Income Tax Act of 1961. The interest estimate would start from the day deadlines ends, meaning the later you file the returns, the more interest you pay.
Benefits You May Lose for late filings of returns
benefits of early itr filing
  • A belated I-T return will mean that you would not be able to carry forward capital losses in the next financial year. This basically means that you will not be able to minimize your tax burden for the next financial year, and you will not be able to cover your tax liability against income.
  • If you are entitled to a refund, you will not be allowed to seek the refund if you file your return after the due date. You should also note that if you file an ITR within the due date, the interest on the refund will be determined from 1 April of the relevant assessment year to the date of the refund. You will miss out on this interest if you file a late return.

You should file your tax returns on time, as delays can lead to a review by the Income Tax Department.

Recent Post:-

Can I claim Income Tax benefit on both HRA and home loan?

There is no limit on claiming a simultaneous tax benefit for HRA and a home loan for the same year.

In order to receive HRA benefits, you must satisfy the condition that you are currently paying rent for the residential accommodation you occupy and which is not owned by you. The HRA benefit shall be measured for the period for which the rent is actually paid and not for the year as a whole. And you will be able to claim the HRA benefit before you pay the bill on the rental home.

home loan

Similarly, in order to claim the interest under Section 24(b), you must pay interest on the loan taken to purchase the property that is your property and is in your possession. Please notice that you will be entitled to claim interest for the entire year as there is no requirement for a proportionate tax allowance under Section 24(b). So even though you took ownership of the house on the last day of the financial year, you would still be entitled to claim rent for the entire year.

In the case of interest paid before you have taken possession, the same balance will be stated in five equivalent instalments , starting with the year in which you took possession of it. For self-occupied land, the gross interest argument consisting of interest during the construction phase as well as for the current year is limited to two lakh rupees per year and the excess interest above two lakh rupees would have to be ignored.

hra

In the case of let out property, the full interest is allowed but the loss under the house property is required to be compensated against other income to the amount of two lakh rupees per year and the loss not so set off is eligible to be carried forward and written off against the revenue under the heading “Income from other sources” for the next eight years. So you’ll be able to claim HRA for 11 months. The interest for the year 2019-2020 and 1/5 of the total interest charged before 31 March 2019 will also be permissible under the limit of ₹2 lakh7 as this is your self-occupied house.

Recent Post:-

Tax Compliance Due date- Updates

1. Income tax all pending 80C investments for the Financial Year 2019-20, in PPF Mutual Funds FD LIC etc can be made till 30th June 2020

2. TDS payment for the mth of March 20 need to be made before 30th April itself however return due date for Q4 id 30th June 2020

If paid after 30th April, there will be interest liability @9% pa.

3. GST returns

For, Monthly and Quarterly returns in Form GSTR 1 – No late fee or interest and due date is 30th June 2020 (return period March April and May)

For Mthly GSTR 3B returns the due dates are shifted to 30th June 2020

However, for cos. or entities above 5cr turnover payment delay of more than 15 days will attract int @9%

roc due dates

4. ROC due dates :-

DIR3 kyc for Directors – 30th April 2020
MSME form – 30th April 2020
Form 11 for LLP – 30 th May 2020
DPT 3 return – 30th June 2020

5.Yearly PTEC payments (Prof. Tax) of 2500 due on 30.06.2020

6. GST annual return and Audit for FY 18-19 in Form GSTR 9 and 9C – 30.06.2020

7. All existing trusts need to re-register under Income tax 12AB and 80G before 31st Aug 2020

Latest Updates:-

  • Understanding Tax Deduction at Source (TDS)
    Understanding Tax Deduction at Source (TDS) Tax Deduction at Source (TDS) is a mechanism where income tax is automatically deducted from payments made to a person during specified transactions. This process ensures timely tax collection by the government by collecting the tax upfront. TDS is typically deducted on incomes such as […]
  • Filing your income tax return early this year? Understanding these 5 essential points is crucial.
    Filing your income tax return early this year? Understanding these 5 essential points is crucial. It is precisely 45 days since the end of the 2023–24 fiscal year, and there are 75 days remaining before the July 31 deadline for filing income tax returns (ITRs). This is a great moment for an individual […]
  • CBDT Introduces Enhanced Feature in Income Tax AIS: Track Your Correction Request Status Now
    CBDT Introduces Enhanced Feature in Income Tax AIS: Track Your Correction Request Status Now Many taxpayers who identified inaccuracies in their Annual Information Statement (AIS) had provided feedback but were unsure if the reporting entities, like banks, addressed their concerns. However, the Central Board of Direct Taxes (CBDT) has updated the […]
  • Understanding the Consequences of Incorrect HRA Declarations
    Understanding the Consequences of Incorrect HRA Declarations The income-tax department has discovered between 8,000 and 10,000 high-value cases, each containing false House Rent Allowance (HRA) claims totaling more over Rs 10 lakh. Rather than the original property owners, taxpayers are claimed to have given PANs of acquaintances, lower-class relatives, and themselves […]
  • Understanding HUF in Income Tax: Benefits, Exemptions, and Rules
    Understanding HUF in Income Tax: Benefits, Exemptions, and Rules The time is almost here to file returns and pay income tax. By July 31st, all taxpayers must file their taxes. Every taxpayer attempts to save taxes when filing their ITR. Is there a separate tax exemption for Hindu families? This exemption […]