Missed the income tax return deadline? You can still file it with a fine

What is belated return?

Return of income that has not been furnished on or before the due date specified under section 139(1) is called belated return. Belated income tax return is furnished under section 139(4) of the Act.

Any person who has not furnished a return of income within the time period allowed under section 139(1) or within the time period allowed under a notice issued under section 142(1), may furnish return for any previous year – at any time before the end of the relevant assessment year or before completion of the assessment, whichever is earlier. So, for Financial Year 2019-20, you can file a belated return till March 31, 2021.

Penalty on belated return?

A belated return attracts late filing fees under section 234F. As per section 234F, late filing fees of Rs 5,000 shall be payable if the return is furnished after the due date but before December 31 of the assessment year. In other cases, late filing fees of Rs 10,000 is payable. However, the amount of late-filing fees to be paid cannot exceed Rs 1,000, if the total income of the person does not exceed Rs 5 lakh.

Late-filing fee under section 234F is not to be levied in case you are not required to file ITR as per section 139 but filing it voluntarily, though after the due date. Naveen Wadhwa, DGM, Taxmann, says Section 139 of the Income-tax Act, 1961, provides that every person, other than a company or a firm, is required to furnish return of income by the due date if his total income or the total income of any other person in respect of which he is assessable under this Act exceeded the maximum amount which is not chargeable to income-tax.

However, an assessee who is mandatorily required to file the ITR as per rules, but fails to furnish his return of income by the due date has to face various consequences such as levy of fee, interest, denial of certain deductions, and denial of carry forward of losses, adds Wadhwa.

In simple words, if your income is below the basic threshold limit – up to Rs 2.5 lakh for those less than 60, Rs 3 lakh for senior citizens aged 60-80 and Rs 5 lakh for those above 80 – you are not mandatorily required to file your return. However, if you voluntarily decide to file the return, you need not pay a late fee, even if you file it after the due date.

"Individual taxpayers can still file their ITR for FY 2019-20 till March 31, 2021, with payment of late fee of Rs 10,000.  Additionally, interest under section 234A at the rate of one per cent per month for delay in filing of ITR and interest u/s 234B (if there is any self-assessment tax payable) at the rate of one per month would also be charged," says Shailesh Kumar, Partner, Nangia & Co LLP.

Kumar further says that apart from the late fee and interest, another major implication is that taxpayers filing their ITR beyond extended due date will not be able to carry forward and set off any loss for the current financial year, to any future financial years. "This may specifically impact taxpayers who incur any business loss or house property loss or capital loss during FY 2019-20 and who intend to carry forward and set-off such loss against their taxable income of future financial years," he says.

So, don't wait endlessly to file your return. "Filing of return is your duty and earns for you the dignity of consciously contributing to the development of the nation. Apart from this, your income-tax returns validate your credit worthiness before financial institutions and make it possible for you to access many financial benefits such as bank credits, etc.," says the tax department. In case of queries on e-filing of return, the taxpayer can contact 1800 180 1961, the income tax department’s helpline number.