The last date to file Income Tax Return (ITR) was July 31, and this year it has not been extended, yet. According to data shared by the income tax department more than 5.10 crore ITRs were filed till July 30, 2022, with more than 67.97 lakh ITRs filed on the last day. But if you are among those who have not filed the ITR yet then don’t be disheartened as you can still file your ITR but the late filing comes at a price.
First, the major consequence of late filing is a penalty. There would be a penalty for the late filing of income tax returns. “Penalty would be Rs 5000 if total income is more than Rs 5 lakh and Rs 1000 if gross total income is more than basic exemption limit (Rs 2.5 lakh ) but total income is less than Rs 5 lakh. There won’t be any penal charges if gross total income is not exceeding the basic exemption limit (i.e. 2.5 lakh),” says Sujit Bangar, founder, taxbuddy.com.
Second, if there is tax to be paid, you will be charged interest at 1 per cent per month after the end of the due date till you pay taxes and file ITR. “The taxpayer has to pay an interest of 1 per cent per month under section 234A until they file their ITRs,” said Yeeshu Sehgal, Head of Tax Markets, AKM Global, a tax and consulting firm.
Thirdly, one cannot carry forward losses. This means a taxpayer will not be able to carry forward any losses for the current year if the ITR is not filed upto the due date.
According to tax rules, a long-term capital loss can be set off only against long-term capital gains while short-term capital losses are allowed to be set off against both long-term gains and short-term gains. Moreover, if you are not able to set off your entire capital loss in the same year, both short-term and long-term losses can be carried forward for 8 assessment years. But if one doesn’t file the ITR within the due date then carrying forward is not allowed.
Lastly, late filing of ITR will result in late processing and your refund, if any, will get further delayed.
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