ITR filing: Deadline for Income Tax Return ends on July 30; know fines if you miss
If you miss the July 31 deadline, you still have until December 31, 2022, to file your return. However, you will be charged a late fee. It will also have some financial consequences.
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FollowThe deadline to file an income tax return (ITR) for the assessment year 2022–2023 or the fiscal year 2021–2022 is July 31, 2022. It's fine if you've already submitted the return or if you are able to do so before the due date. But what if you don't file your ITR by the July 31 deadline?
If you don't file your return by July 31, you have until December 31, 2022 to do so. You will, however, be charged a late fee. Additionally, there will be some financial consequences.
For taxpayers with a yearly income up to Rs 5 lakh, the late fee is Rs 1,000. If your annual income exceeds 5 lakh, the late fee is 5,000.
However, if your total gross income does not exceed the basic exemption limit, you will not be penalised for filing late.
The income tax regime determines the basic exemption limit you select. Under the previous income tax regime, the basic tax exemption limit for taxpayers under the age of 60 was set at Rs 2.5 lakh. The basic exemption limit for people between the ages of 60 and 80 is set at Rs 3 lakh. The exemption limit for people over the age of 80 is Rs 5 lakh.
The basic tax exemption limit under the new concessional income tax regime is Rs 2.5 lakh, regardless of the taxpayer's age.
Gross total income is the sum of one's earnings before any deductions allowed by sections 80C to 80U of the Income Tax Act.
Aside from the late fee charges, missing deadlines have several other consequences. If you miss the deadline, you will have to pay interest on your tax debt.
Co-Founder and CEO, TaxSpanner, Sudhir Kaushik, said that while filing ITR, some tax may be payable, such as interest and dividends. TDS is deducted at 10 per cent, but you are in the 20 per cent or 30 per cent tax bracket, so the difference in tax must be paid with interest at the rate of 1 per cent per month under Section 234 A.
You can simply deposit the unpaid tax if you file your return before the due date. If you miss the deadline, you will be required to deposit the unpaid tax and the interest retroactively from July 31. If the outstanding balance is not paid by the 5th of the month, the interest for the entire month must be paid at a rate of 1 per cent per month.
A taxpayer's liability can be reduced by offsetting losses from business operations or selling property against other income. However, losses may be carried forward if the ITR is submitted before the deadline.
Sudhir Kaushik stated that if you miss the due date, you cannot carry forward any losses (other than losses from house property). Losses on selling property/shares/capital assets forced to sell during corona must be declared and filed by the due date.
According to the Income Tax Act, business losses (other than speculative business losses) can be deducted from any source of income except salary. Any unadjusted loss can be carried forward for eight fiscal years immediately following the current fiscal year and offset against any business income by the rules. For example, business losses in fiscal years 2020-21 can be offset against business income in fiscal years 2021-22 and subsequent years.
The Income Tax Department may issue you a notice for failure to file or mismatching.
Regarding the possibility of receiving a notice from the Income Tax Department, Kaushik stated that many people invested in equity during the Covid pandemic, as evidenced by ITR and AIS filings (annual information statement). As a result, tax notices for declared income/loss mismatches can be expected.
If you miss the July 31 deadline, the deadline for filing a belated income tax return for the fiscal year 2021-22 is December 31, 2022.
If you miss even the December 31, 2022 deadline for refunds and losses, you must file an appeal for condonation with your ward's commissioner of income tax for refunds and losses carried forward. "If the reason is genuine, you might get permission," Kaushik added.
If you owe taxes, you will face severe penalties. Kaushik explained that if you discover additional income in AIS or other documents that were not declared in the original return or were not filed at all. Adding that, you must pay 50 per cent additional tax of this pending tax amount if filing an updated return within a year and 100 per cent additional if filing after one but before two years.
If you miss the December 31 deadline, you must use a new form ITR U for updated returns and provide reasons for updating your income. The reasons could include: a previously unfiled return; incorrectly reported income; incorrect heads of income selected; reduction of carried forward loss; reduction of unabsorbed depreciation; reduction of tax credit under sections 115JB/115JC; incorrect tax rate, and others.
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Also Read: ITR filing: If your annual income is up to Rs 2.5 lakh, do you need to file tax?
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