Over 60 million ITRs already filed! You'll have to pay this penalty if you don’t file tax returns today

Today is the last day to file your Income Tax Return (ITR). More than 60 million ITRs have been filed till July 30, out of which about 2.67 mullion ITRs were filed till 6.30 pm yesterday, with more than 13 million successful logins. The number of ITR filings has already crossed the number of ITRs filed till July 31 last year.

This has been a remarkable number considering more than 66.3 million ITRs were filed for AY 2021-22 as on March 15, 2022, which was the due date for filing of ITRs by companies and other taxpayers who were required to file Tax Audit Report. “Out of the [66.3 million] ITRs filed for AY 2021-22, 46% are ITR-1, 9% are ITR-2, 15% are ITR-3, 26% are ITR-4, 2% are ITR-5, ITR-6 and ITR-7. This reflects an increase of over [1.67 million] ITRs over total filing of ITRs for AY 2020-21 till 15.03.2021,” said a press release issued by the finance ministry. 

Hence, if you have filed your ITR do it today as not filing your return on time will invite the following: 

Late Fees: Filing your taxes late can lead to penalties, depending on your total income. Individuals with a total income exceeding Rs 5 lakh will be charged a penalty of Rs 5000, while those with income up to Rs 5 lakh will face a penalty of Rs 1000. It can also result in the loss of tax deductions and exemptions, leading to higher tax liability. For ITR filed after December 31st, late  fees is Rs 10,000. 

Interest cost: If you owe taxes and miss the due date for filing your return, you will incur an additional interest of 1% per month until you submit the return. Interest will be charged at 1% per month until the return is filed. Moreover, after December 31, you can still file updated returns if you have tax payable, but you will need to pay an additional 25% tax until March 31, 2024, and 50% thereafter until December 31, 2024.

Penalties: Underreporting of income can lead to penalties of up to 50%, while misreporting of income may result in penalties of up to 200%. Ignoring tax return filing despite reminders may lead to authorities initiating prosecution procedures, with potential imprisonment ranging from three months to 7 years based on the tax outstanding.

No carrying forward of losses: Failure to file returns on time will prevent you from carrying forward certain losses to future years. Only house property losses can be carried forward if returns are not filed on time.

Tax refunds: Late filing may also cause delays in receiving tax refunds, if applicable, leading to financial strain and inconvenience. Moreover, late filers may draw the attention of tax authorities, increasing the likelihood of audits and inquiries into their tax affairs.

Last but not least. To avoid these adverse outcomes, it is essential to promptly file your ITR and ensure compliance with all tax regulations before the deadline. Seeking professional advice is highly recommended, particularly for complex or uncertain tax situations, as tax experts can help navigate the process, ensure compliance, and maximize eligible tax benefits. Remember that filing your ITR on or before July 31 for FY 2022-23 is a must to avoid late fees and penalties.