Last day to file Income Tax Returns (ITR): Here's what happens if you miss deadline

Taxpayers do have the opportunity to finalize the tax filing process after the original deadline, subject to a late fee of Rs 5,000. These delayed ITRs must be filed before December 31. However, for individuals with a total income not surpassing Rs 5,00,000, the penalty will be limited to Rs 1,000.

The clock ticks on the deadline for filing Income Tax Returns (ITR) for the assessment year 2023-24, which concludes today. The latest reports reveal that an impressive count of over 6 crore ITRs has been successfully filed until 6:30 PM on July 30. The Income Tax department has issued a fervent appeal to taxpayers, urging them to promptly complete the filing process, emphasizing that no extensions will be granted in the deadline this year. Failing to meet the deadline might result in penalties and other consequences for the concerned taxpayers.

Let's take a look at the consequences when a taxpayer misses the ITR filing deadline:

Payment of late fees

Taxpayers do have the opportunity to finalize the tax filing process after the original deadline, subject to a late fee of Rs 5,000. These delayed ITRs must be filed before December 31. However, for individuals with a total income not surpassing Rs 5,00,000, the penalty will be limited to Rs 1,000. Additionally, taxpayers whose total income falls below the basic exemption limit won't incur any late filing fees.

Interest on taxable amount

The Income Tax department levies a 1 percent monthly interest rate on the taxable amount when there is a delay in filing the return. This interest is applicable to the net taxable income after deducting TDS, TCS, advance tax, and other allowable reliefs or tax credits as per the law. It's important to note that even a mere one-day delay incurs a full month's interest in such cases.

No carry forward of losses

Failure to file the tax return by the designated deadline will result in the forfeiture of the option to carry forward losses to subsequent years. Nonetheless, there are exceptions to this rule, as losses falling under the category of "income from house property" or unabsorbed depreciation will still be permitted to be carried forward.

Imprisonment and fine

In addition to financial penalties, failing to file tax returns can also result in imprisonment. If the late filing involves a tax payable or evaded amount exceeding Rs 25,000, individuals may face imprisonment ranging from 6 months to 7 years, along with a fine.

Delay in refund claims

For a taxpayer to claim a refund for excess tax deducted, it is essential to file income tax returns. Timely filing is crucial to be eligible for interest on these excess deductions, following the prescribed schedule. However, failure to file ITR on time may lead to extended waiting periods or even the loss of the tax refund altogether.