ITR filing 2024: What will happen if you miss filing returns by July 31? Check details on belated ITR

ITR filing: As the deadline for filing Income Tax returns (ITR) draws near, individuals should be aware that failing to meet the deadline can result in serious consequences. The deadline for submitting income tax returns for the financial year 2023-2024 (Assessment Year 2024-2025) is July 31, 2024. If individuals miss the July 31 deadline, they have the opportunity to file a belated return by December 31, 2024, for the financial year 2023-2024 / Assessment Year 2024-2025. 

A Belated Return refers to a return that is filed after the deadline, which is on July 31 for the current assessment year. One should file the belated ITR before December 31 of the same assessment year. Despite the repercussions of late filing, submitting a belated return is preferable to incurring penalties for non-compliance.

Income tax regulations stipulate that failing to submit your Income Tax Return (ITR) by the deadline will result in the automatic assignment to the new tax regime. This means forfeiting the option to select the old regime for the respective financial year. Late submission of the ITR under these circumstances will place the individual under the new tax regime.

It is crucial to be aware that taxpayers have the privilege of choosing a tax regime when filing their ITR. The standard deadline for ITR submission is July 31, and compliance with this cutoff implies acceptance of the tax regime tailored for salaried individuals.

In India, there are currently two tax regimes being operated: the old regime and the new regime, the latter of which was introduced in 2020. The new regime features revised tax slabs and concessionary rates. However, individuals opting for this regime must be aware of restrictions related to claiming specific deductions and exemptions under sections 80CCD (2) and 80JJA (pertaining to business income).  It is crucial to understand that individuals who do not actively select a tax regime will automatically be placed under the new tax regime by default.

Penalty

For the Financial Year 2023-24, the deadline to file income tax returns is set on July 31, 2024. Should you fail to file your ITR by the initial due date, you have the option to submit a late return. According to Section 234F of the Income Tax Act, late filing fees of Rs 5000 can be levied. It is important to note that if your income does not exceed Rs 5 lakh, the late filing fees is reduced to Rs 1,000.

Interest will be charged at the rate of 1% per month or part of the month on the outstanding tax amount from the due date, as per Section 234A of the Income Tax Act. Failure to pay self-assessment tax or underpayment of the tax can lead to penalties under Section 140A (3) of the Income Tax Act. It is important to highlight that the penalty imposed cannot surpass the amount of tax in arrears.

Capital losses

Taxpayers who choose to file their income tax returns late risk forfeiting the opportunity to carry forward any capital losses they might have suffered. This would mean that they are unable to utilize these losses to offset future gains, which in turn would result in a higher tax liability in the upcoming years. It is crucial to understand that with the exception of house property losses, other types of losses cannot be carried forward if the tax return is submitted after the due date.

Under the provisions of income tax laws, individuals are allowed to carry forward losses for a period of up to 8 financial years. This provision serves as a beneficial option for taxpayers, as it permits them to set off these losses against future capital gains. This strategy effectively reduces their taxable income and consequently decreases the income tax liability they are obligated to pay. Losses incurred from various sources such as capital gains, house property, business, profession, speculation business, and other avenues are eligible to be carried forward in accordance with the income tax regulations.