It is a general belief within many taxpayers that once the taxes are paid, they are not required to fulfil any further obligations. However, just like tax payment, even filing of the income tax return is mandatory under income tax law.
Obviously, just like any other return, it is obligatory for each and every assessee to file their income tax return within the prescribed due date. However, in case the assessee fails to file their income tax return within the prescribed due date, such defaulters have to face various consequences which are described in the present article.
Filing of return after due date –
First of all, it is important to note that for the Assessment Year 2019-2020, the due date for filing of an income tax return had been extended from 31st July 2019 to 31st August 2019. If the taxpayer misses the said extended due date of 31st August 2019, one can still file the return. Such return, filed after the due date, is called a ‘belated return’.
The time period for filing the belated return is earlier of the following –
- Within the end of the relevant Assessment Year (i.e. within 31st March 2020 in case of return for Assessment Year 2019-2020); or
- Before completion of the assessment.
The consequence of filing of return after the due date –
As seen above, even after missing the due date, the assessee has an option to file the belated return. However, such belated return filing comes with a bundle of late fees and other consequences which are explained herein below –
Late fees for default in the furnishing of income tax return –
Section 234F of the Income Tax Act, 1961 contains provisions relating to levy of penalty/ late fees in case of default in filing of an income tax return. The provisions of section 234F are applicable only from the Assessment Year 2018-2019 (Financial Year 2017-2018).
As per section 234F, late fees in case of default in filing of an income tax return is payable as per below mentioned table –
|Particulars||Total income less than INR 5 Lakhs||Total income more than INR 5 Lakhs|
|Return furnished on or before 31st December||INR 1,000||INR 5,000|
|In any other case||INR 1,000||INR 10,000|
Interest for defaults in the filing of the income tax return –
In case the assessee has not filed the income tax return within due date and has also not paid the tax liability, then, as per provisions of section 234A, the assessee is liable to pay interest.
The defaulter assessee is liable to pay interest @ 1% per month or part thereof on the outstanding tax amount.
Barred from carrying forward the loss –
In case the assessee fails to file the income tax return within due date, then, such defaulter assessee is not allowed to carry forward following losses –
- Losses under the head Income from business and profession (including speculation business).
- Losses under the head income from capital gains.
- Losses under the head income from other sources.
Please note, losses under the head income from house property is allowed to be carried forward even if the belated return is filed by the assessee.