The due date to file Income Tax Returns (ITR) for the financial year 2021-22 is July 31. Many taxpayers faced several issues in recent weeks and demands have been made to extend the ITR due date. However, the government is unlikely to do so. Here’s what happens if you fail to file the ITR before July 31.
Taxpayers who miss the due date will still be able to file their ITR by the last date or the final deadline. The last date is December 31 but there’s a catch. You will have to pay a fee.
Any delay beyond July 31 can attract interest on the tax due, as per Section 234A of the Income Tax Act of 1961.
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The late fee for the taxpayers whose annual income is up to Rs 5 lakh is Rs 1,000. If your annual income is more than Rs 5 lakh the late fine is Rs 5,000. However, you will not be liable to pay a penalty if your gross total income does not exceed the basic exemption limit.
But the basic exemption limit depends on the income tax regime. Under the new regime, the exemption limit is Rs 2.5 lakh, irrespective of the age of the taxpayers. So any taxpayer, irrespective of age, who earns less than Rs 2.5 lakh a year is not liable to pay a penalty for late filing.
An interest of 1 per cent is applicable on the outstanding amount if you don’t pay tax till July 31, 2022. This is irrespective of whether the tax amount was filed wrong or not.
So, retrospectively from July 31, the taxpayer will have to deposit the outstanding tax along with the interest. Also, if the outstanding tax is paid on or after the 5th of any month, the interest for the full month will have to be paid.
A taxpayer will not be able to carry forward any losses for the current year if the ITR is not filed by July 31. Therefore, any loss incurred under the business income or capital gains or loss beyond Rs 2 lakh under the house property head, cannot be carried forward to the subsequent year.
In case you miss the December 31 deadline, you would be required to file an appeal for condonation with the commissioner of income tax of your ward for refund and losses carried forward.
A new form ‘ITR U’ has to be used for updated return and reasons must be give for updating your income. It could be: return previously not filed, income not reported correctly, reduction of carried forward loss, wrong rate of tax and others.
As per the Income Tax department, more than three crore ITRs have been filed on e-Filing portal till 25th July, 2022.