ITR filing deadline: What happens if you miss filing returns by July 31 this year?

The deadline for filing income tax returns is near and you better not miss it. If you end up doing so, you will be entitled to a penalty on top of the tax due and interest. Though you would be able to file a belated return until December 31, that will come with a late fee. However, with three days remaining until July 31, you still have time to file your returns, so make sure not to miss this deadline.

Missed deadline consequences

If you end up missing the deadline to file ITR for the fiscal year 2023-24, you would be entitled to an opportunity to file a belated return by December 31. However, that will come with an additional penalty, along with tax due and interest.

In addition, the missed deadline would be a huge setback for old regime adopters who have paid taxes and submitted income and investment proofs accordingly. They would lose the benefits of the old regime, as taxpayers would be automatically transferred to the new regime as a default option. This could turn out to be an unlikely situation for taxpayers preferring the old regime, as the new regime is limited when it comes to various deductions and exemptions.

Late fee and penalty

If you are not able to file ITR by July 31, you can still submit a belated return. However, that will come along with a penalty. A late fee of up to Rs 5,000 will be imposed in case of late ITR filing as per Section 234F of the Income Tax Act. If your taxable income does not exceed Rs 5 lakh, then the penalty amount will get reduced to Rs 1,000. Also, even if the belated ITR shows zero tax payable, the penalty would still be applicable.

In accordance with Section 234A of the Income Tax Act, interest on the outstanding tax amount will be charged at a rate of 1% per month or part of a month from the due date. Non-payment or underpayment of self-assessment tax will lead to penalties as per Section 140A(3) of the Income Tax Act. However, the penalty will not go beyond the amount of tax in arrears.

After missing the final belated return filing deadline

In case you end up missing the final belated return filing deadline, you will still have the option to file an updated tax return within two years from the end of the applicable assessment year. For instance, the updated tax return for fiscal year 2023-24 can be submitted until March 31, 2026. Filing an updated return within one year from the end of the assessment year will make you liable for an additional 25% tax on the total tax and interest. If you file the updated return one year late but before the two-year deadline, you will be eligible for an additional 50% tax on the total tax and interest.