Income tax penalty on late filling of IT return – For individuals

Individuals having income more than the basic exemption limits are required to file Income Tax return before the due date as specified under Income tax act. Two types of due dates are specified for filling your IT return.

1. Individuals who are required to carry on income tax audit u/s 44AB of IT act.
2. Other individuals

Individuals coming under the first category are required to file their Income Tax return on or before 30^th September of the assessment year in which you are filling your IT return.

For financial year ending 31^st march 2013, Income tax return filling due date is 30^th September, 2013. This category is applicable to those individuals who are into business or profession and during the financial year their income or gross receipt from such business or profession exceeds Rs. 1 crore or 25 lakhs respectively. To know more on IT audit please refer this article. 

For other individuals not coming under the first category i.e. salaried personal, self employed persons having lesser turnover as specified above are required to file their IT return on or before 31^st July of the relevant assessment year to the financial year for which you are filling your IT return.

For financial year ending 31^st march 2013, the due date of filling your IT return is 31^st July 2013. Due dates can be extended by CBDT based on circumstances and situations. If such due dates are extended then the extended due date will be considered as the actual due date instead of taking 31^st July as the due date. For financial year ending 31^st march 2013 the due date has been extended to 5^th august 2013.

In case such due dates are missed then penalty provisions are applicable. In addition to such penalty other benefits are also not available. Let use discuss these in detail.

Cannot file revised return

We might miss out something after filling our IT return. If such things happened then that can be rectified by revising your IT return. As per the provisions of IT act, you can revise your income tax return only if such return is filled on or before the due date of filling IT return (i.e. 31^st July). That means mistakes on your IT return filled after the due date cannot be revised.

Penalty of late filling Income Tax Return

There is a penalty of Rs. 5000 if income tax return has not been filled within one year from the end of the financial year (i.e. before 31^st march of the following financial year). Such penalty amount can be levied at the discretion of the assessing officer i.e. if Income Tax Return has not been filled and department has issued a notice for filling IT return then in addition to the income tax and interest amount, a penalty of Rs. 5000 will be charged on you.

Please remember this provision will not be applicable if you missed the tax return filling due date. It will be applicable only if after missing the due date, you have not filled your IT return before one year from the end of the financial year.

For financial year ending 31^st march 2013, the assessment year is 2013-2014 which ends on 31^st march, 2014. An individual who has not filled his IT return before 5^th august 2013 (CBDT has extended due date for financial year 2012-2013 from 31^st July to 5^th august) has to compulsorily file his IT return before 31^st march 2014 (one year from 31^st march 2013) to avoid such penalty.

Interest Penalty

As per section 234A of IT act, you need to pay a simple interest @ 1% per month on the outstanding income tax liability from the due date of filling IT return up to the actual date of filling. However no interest will be charged on you if Income tax liability on your taxable return has already been deducted or deposited and there is no tax liability as on the due date (i.e. 31^st July).

In addition to 234A you may require to pay interest under section 234B and 234C for late payment of taxes which will be more if you delay for a longer time.

Apart from the above mentioned cases there can be other disadvantages for missing the due date of filling income tax return. Like for late filling of IT return i.e. after due date, it will delay in getting IT refund and you will also lose interest amount on such refund.

In addition to refund, if you have loss during the financial year and IT return for such financial year has not been filled within the due date then such losses cannot be carried forward to coming financial years. However depreciation losses can be still carried forward even though income tax return has not been filled before the due date.