What Happens If You Don't File Your Income Tax Return By July 31

The deadline to file the income tax return (ITR) for the assessment year 2023-24 is set to end on July 31. Filing due taxes is the duty of every responsible citizen of the country. Taxpayers who fall under the taxable bracket, are advised to file their return at the earliest to avoid any last-minute panic or delay. Failure to file the tax return within the stipulated time frame may invite a penalty and other consequences. Here are options available to a taxpayer who misses the deadline of July 31.

Late Fees

A taxpayer, who misses the initial deadline of July 31, can still file their return before December 31 but with a penalty fee of Rs 5,000. However, if the total income of the taxpayer doesn't exceed Rs 5,00,000 the penalty will be restricted to Rs 1,000. If your income is less than the basic exemption limit and you are filing a return after the deadline, there will not be any late filing fees. The provision of late filing fees was introduced in the financial year 2017-18 under a new Section 234F of the Income Tax Act, 1961.

Penal Interest On Tax Amount

In case of delay in filing an income tax return, interest at the rate of 1 per cent per month is charged on the taxable amount. Even a single-day delay is considered a month in such cases. The interest shall be applicable on the income amount after deduction of TDS (tax deducted at source), TCS (tax collected at source), advance tax and other reliefs/ tax credits available under the law,

No Carry Forward Of Losses

In case of failure to file the tax return by the due date, the taxpayer will not be allowed to carry forward any loss under "profits and gains of business or profession" or "capital gains" to the next year. However, loss under the head "income from house property" and unabsorbed depreciation will be allowed to be carried forward.

Delay In Filing Processing

After filing the ITR, the Central Processing Centre, Bangalore, of the Income Tax Department processes it. It is done to determine whether there is tax liability or refund of the taxpayer. In case a taxpayer has to claim a refund, a delay in filing the return could result in a prolonged wait for the receipt of the tax refund.