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Haven't filed your ITR yet? Here's what happens if you miss the deadline today

The ITR filing deadline has been extended twice, first from the usual July 31, 2021, to September 30, and then eventually, to December 31

December 31, 2021 / 11:47 AM IST

Planning to ring in the new year today with a blast, or thinking of a cosy get-together with your loved ones to welcome 2022? Well, before you let your hair loose and sashay into the next year, filing your Income tax return (ITR) should make it to the top of your to-do list. The deadline for the same is December 31. IF you haven't filed your ITR, make sure you do it by today midnight.

As per a tweet by the Income Tax department, as of December 30, more than 5.34 crore ITRs have been filed. Out of this, around 24.39 lakh ITRs were filed just yesterday. So, if you are one amongst them, you need not worry. But if you are still lagging in this regard, the potential financial consequences impending on you could be huge.

The ITR filing deadline has been extended twice, first from the usual July 31, 2021, to September 30, and then eventually, to December 31. Note that the last date for filing belated ITR for FY 2020-2021 i.e. AY 2021-2022 is March 31, 2022. For the uninitiated, AY i.e. Assessment Year is the year post financial year (FY) where your income is assessed and evaluated. 

While the due date i.e. December 31 indicates the day you can file your income tax returns without paying any penalty charges or foregoing any benefits, the last date i.e. March 31 is the final day you can file your ITR with the IT department, after paying the relevant fine and fees. 

What happens if you do not file your ITR by December 31?

In the event you miss out on filing your returns today, you will have to pay a maximum fine of Rs 5,000, a substantial reduction from the earlier levy of Rs 10,000. This is applicable in case your income is above Rs 5,00,000. If your income ranges up to Rs 5,00,000, you will only be required to pay Rs 1,000 as a fine for filing ITR after December 31. But, if your annual income does not fall in the taxable category, you will not be charged any penalties. 

The midnight of 31st December is the due date only for individual taxpayers whose accounts are not required to be audited. For companies whose accounts need to be audited, the ITR filing deadline has been pushed to February 15, 2022. This, yet again has been extended from the original deadline of October 31, 2021, and then November 30, 2021. 

You can still file your returns under ‘belated returns’, under section 139 (4) of the Income Tax Act, 1961. Here is a list of financial implications you will have to face : 

  • Payment of penal interest on unpaid tax liability, if any. This amount, payable by assesses will increase proportionately to the delay.

  • You will also have to forego any interest on refund of excess taxes you have paid for the delay period.

  • You will not be able to set off losses against your current year's income if you fail to file the ITR before midnight today.

  • Significantly, you will not be able to carry forward any losses despite timely payment of all past taxes. This includes losses from business and profession, short-term or long-term capital losses or any other losses. The only exception here is the loss from house property up to an amount of Rs.2 lakh.

  • For carrying forward the losses, it is compulsory that you file all taxes before the due date. Notably, taxpayers can carry forward their short and long-term capital losses to a maximum of 8 assessment years immediately after the AY in which the loss was evaluated. 

And in the situation you don't file your income tax returns at all, you will be subjected to a penalty that can range anywhere between 50-200 percent of the assessed tax. In addition, there is also a provision of prosecution i.e. rigorous imprisonment of up to 7 years. 
Ira Puranik
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