New Delhi :
If you haven’t filed your Income Tax Return (ITR) yet, you have to suffer the consequences of missing the July 31st, 2023 Deadline.
Penalty for Late Filing
Late filing of ITR can lead to penalties. Individuals with income above Rs 5 lakh face a penalty of Rs 5,000, while those with income up to Rs 5 lakh incur a fine of Rs 1,000.
Additionally, failure to file ITR on time may result in the loss of certain tax deductions and exemptions, increasing your overall tax liability.
After December 31, 2023, the penalty for late filing increases to Rs 10,000.
Interest on Late Filing
For taxable incomes, late filing of ITR attracts additional interest at a rate of 1% per month until the return is filed.
The interest is levied from the due date of filing until the actual filing date.
After 31st December, the option to file an updated return is available only in cases where tax is due and payable up to 31st March 2024.
Prosecution for Non-Filing
Failure to file ITR despite reminders may lead to prosecution based on outstanding taxes.
Under-reporting income can result in fines up to 50%, while misrepresenting income may lead to penalties up to 200%.
The authorities may initiate prosecution, which could result in imprisonment ranging from three months to seven years.
Missed Benefits of New Tax Regime
If you’re late beyond March 31, salaried employees lose the option to select the new tax regime.
Choosing this option with the employer after the deadline will incur additional taxes and interest due to late ITR filing.
The new tax regime, announced in the February 1 budget, allows tax-free income up to Rs 7 lakh.
Delayed Refunds and Increased Scrutiny
Late ITR filing may lead to delayed tax refunds, causing unnecessary financial stress.
Moreover, it can attract the attention of tax authorities, increasing the chances of audits and inquiries into tax matters.
To avoid penalties, interest, and potential losses, it is essential to file your ITR by the 31st of July and fulfill your tax obligations on time.
