With just few hours left for the July 31 deadline to end, the scramble to file Income Tax Returns (ITR) for the financial year 2023-24 has hit a fever pitch. An extension is not in sight, leaving taxpayers and chartered accountants grappling with income tax portal glitches.
Many took to X to share their last-day frustration from interminable loading times and session timeouts.
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Missing the deadline can lead to severe consequences, including late-filing fees, interest, and penalties. Taxpayers also risk forfeiting the opportunity to claim deductions under the old tax regime. Amid these challenges, calls for an extension have grown louder.
According to Suresh Surana, a practicing chartered accountant, taxpayers who file late will incur a late fee of Rs 5,000 under Section 234F if the return is submitted after the due date specified under Section 139(1). However, if the total income does not exceed Rs 5 lakh, the late fee is reduced to Rs 1,000. Beyond the deadline, a belated return can still be filed up to three months before the end of the relevant assessment year, until December 31, 2024, though this too attracts penalties and may result in the loss of certain benefits, such as the ability to carry forward losses.
Ankit Jain, a partner at Ved Jain and Associates, says a late fee under Section 234F is applicable to all who are required to file their ITRs. This includes individuals with a tax liability and those whose income exceeds the basic exemption limit (Rs 2.5 lakh or Rs 3 lakh), even if they do not owe any tax. Additionally, Section 234A imposes an interest rate of 1% per month or part of the month on outstanding tax amounts from the due date until the ITR is filed. Late filers eligible for a tax refund might also lose out on interest on the refund, as it is calculated from the later of the filing date or the due date.
Despite the penalties, some taxpayers are exempt from these fees. Those with an ITR filing deadline of October 31, 2024, individuals with income below the basic exemption limit, and those not legally required to file an ITR but choosing to do so voluntarily are not penalized for late filing.
Certain classes of taxpayers must still file their ITR even if their income does not exceed the tax exemption limit, provided they file late.
For instance, taxpayers with cumulative savings bank deposits exceeding Rs 50 lakh in a year, individuals with annual sales turnover over Rs 60 lakh, professionals earning over Rs 10 lakh annually, or those paying electricity bills exceeding Rs 1 lakh in a financial year, must file their ITR. Other criteria include individuals with TCS/TDS exceeding Rs 25,000 (Rs 50,000 for senior citizens), those with foreign assets or who are beneficiaries of foreign assets, those spending over Rs 2 lakh on foreign travel, and authorized signatories for accounts managed outside India.