Income Tax Return (ITR)- Impact of Delay in filing ITRs–TAXGURU.IN

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The Government of India has framed Income Tax laws governing the taxes to be levied on the taxable income of all persons who are Individuals, HUF’s, Companies, Firms, LLP, Association of Persons, Body of individuals and any other juridical person. Every individual who qualifies as the resident of India is required to pay tax on the taxable income. Every financial year, tax payers are required to file Income Tax Returns (ITR) in adherence to the laid down rules and guidelines.

An Income Tax Return is a form used to file information about your income and tax to Income Tax department. The tax liability of the tax payer is calculated based on the income earned. As per the tax laws laid down in India, it is compulsory to file ITR if your income is more than the basic exemption limit. The income tax rate is pre decided for tax payers and any delay in filing returns will attract late filing penalty fees.

Timelines for filing ITR for AY 2021-22

CBDT has extended the timelines for filing ITR and various audit reports for AY 2021-22 as below:

HeadRevised Timeline
ITR filing by tax payers not covered under audit31st Dec 2021
ITR filing for Tax audit cases15th Feb 2022
ITR filing for Transfer Pricing28th Feb 2022
ITR filing of Belated/Revised Return for FY 20-21 31st Mar 2022
Furnish Audit Report15th Jan 2022
Furnish Audit Report for Transfer Pricing cases31st Jan 2022

Consequences of Delay in filing ITR

Section 234F of the Income Tax was introduced on 1st April 2017. The provisions of this section become applicable if:

1. If the Assessee has not filed ITR as per the provisions of Sec 139

2. If the Assessee has delayed filing of ITR on or before respective due dates

The provision of Sec 234F applies to all categories of persons like Individual, HUF, AOP, BOI, Companies, Firms, LLP, etc in case the ITR is filed after respective due dates. The section has introduced late fee with an objective to ensure timely filing of returns.

Late Fees payable under Section 234F of IT Act:

1. Total Income of the Assessee is more than INR 5 Lakhs

> INR 5000 – ITR filed on or before 31st Dec

> INR 10,000 – ITR filed after 31st Dec

2. Total Income of the Assessee is less than INR 5 Lakhs

> Maximum Amount of Fee payable is INR 1000

Apart from the late filing fee, Assessee also faces below consequences due to delayed filing of returns:

> Unable to set off losses

> Interest on the delay of filing return

> Delayed Refunds (if applicable)

Benefits of timely filing of ITRs

With timely filing of ITRs, the Assessee can avail the below benefits:

> Easy Loan Approvals

> Claim Tax Refund

> Quick Visa Processing

> Carry forward of losses

> Avoid Penalty & Prosecution


About the Author

Author isRuchika Bhagat, FCA helping foreign companies in setting up and closure of business in India and complying with various tax laws applicable to foreign companies while establishing a business in India. Neeraj Bhagat & Co. Chartered Accountants, is a well-established Chartered Accountancy firm founded in the year 1997 with its head office at New Delhi.

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