Last date to file ITR! All you need to know about tax filing, from the right ITR form to late fees

Today is the last date for individuals to file their Income Tax Return (ITR). Late filing of ITR can have significant consequences, including the imposition of penalties and additional fees. Failure to file ITR by the due date may lead to the loss of certain tax benefits and exemptions, and it can also result in increased tax liability.

To avoid such outcomes, taxpayers should prioritise timely filing of their ITR. Being well-informed of the relevant provisions can help ensure a smooth and compliant tax filing process.

This comprehensive guide aims to provide all the necessary information about the last date to file ITR, the right ITR form selection, and the potential implications of late filing. 

ITR-1 (Sahaj): Applicable to individuals who have income from salary, one house property, and other sources (excluding income from business or profession).

Restrictions:
Total income should not exceed Rs 50 lakhs

Individuals who are directors of a company, have investments in unlisted equity shares, or have more than one house property cannot use this form

ITR-2: Applicable to individuals and Hindu Undivided Families (HUFs) who have income from salary, house property, capital gains, and other sources (excluding income from business or profession).

Restrictions
Individuals with income from business or profession cannot use this form.
Individuals who are eligible for ITR-1 cannot use this form.

ITR-3: Applicable to individuals and HUFs who have income from business or profession as a partner or proprietor.

Restrictions
Individuals with income from sources other than business or profession as a partner cannot use this form.
Individuals who have opted for presumptive taxation under sections 44AD, 44ADA, or 44AE cannot use this form.

ITR-4 (Sugam): Applicable to individuals, HUFs, and firms (excluding Limited Liability Partnerships) who have opted for presumptive taxation under sections 44AD or 44AE.

Restrictions
Total turnover or gross receipts should not exceed Rs. 2 crores in a financial year.
Professionals (such as doctors, lawyers, architects) are not eligible to use this form.
Individuals with income from sources other than the presumptive taxation scheme cannot use this form.

Filing the Income Tax Return (ITR) in the wrong form can lead to several consequences and potential issues. Firstly, the Income Tax Department may reject your return if it is incorrectly filed, resulting in non-compliance. In such cases, you'll have to refile the return using the appropriate form. 

Secondly, using the wrong ITR form can trigger additional compliance requirements, leading to unnecessary correspondence, delays, and extra effort. Thirdly, filing in the wrong form may attract penalties or legal implications, ranging from monetary fines to potential prosecution as per the Income Tax Act. 

Moreover, incorrectly filed returns could be subject to scrutiny or assessment by the tax authorities, leading to audits and inquiries into your financial records and transactions. Lastly, using the wrong form may cause you to miss out on eligible tax benefits or deductions applicable to your specific situation. To avoid these adverse consequences, it's vital to choose the correct ITR form and seek professional advice from a tax expert to ensure accurate and compliant filing.

What happens if you miss the ITR filing deadline of 31st July?
Filing ITR late can result in various penalties and consequences. For individuals with a total income exceeding Rs 5 lakh, the penalty is Rs 5000, while for those with an income up to this limit, it is Rs 1000. After December 31, 2023, the penalty increases to Rs 10,000.

Additionally, failure to file the return on time when taxes are due attracts 1% interest per month until the return is filed. Beyond December 31, the taxpayer can file updated returns if there is a tax payable, but they will need to pay an additional 25% tax until March 31, 2024, and 50% thereafter until December 31, 2024.

Non-compliance with filing despite reminders can result in penalties up to 50% for underreporting of income and up to 200% for misreporting. It may also lead to imprisonment ranging from three months to 7 years based on the tax outstanding.

Delay in tax refunds is another drawback of late filing, causing financial strain and inconvenience. Late filers may also draw attention from the tax authorities, increasing the likelihood of audits and inquiries.

To avoid these consequences, timely and accurate filing is crucial. Seeking professional advice can ensure compliance and maximise eligible benefits while minimising potential risks. As responsible taxpayers, understanding and fulfilling our tax obligations protect our interests and ensure smooth compliance with tax legislation.