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What is Penalty for late filing of Income Tax Return AY 22-23

What is Penalty for late filing of Income Tax Return

Every year on July 31st, people must file their income tax returns. The deadline to file an income tax return for corporations and limited liability partnerships (LLPs) that need a tax audit is September 30. Mention the fines that the income tax department may levy for late filing of income tax returns in this article. I am talking about for this article what is Penalty for late filing of Income Tax Return.

Consequences of Late Filing of Income Tax Return

Taxpayers who do not submit their returns by the deadline risk penalties and interest charges for paying their taxes after the deadline has passed. The following repercussions would also befall the taxpayer in addition to the late payment penalty and interest:

  • The taxpayer will not be eligible to make any interest claims for the time that they were late in filing their income tax returns.
  • If an income tax return is filed after the deadline and contains mistakes, the taxpayer will not be permitted to make corrections.
  • If the taxpayer submits a late return, several income tax deductions under Chapter VI-A of the Act will not be permitted.
  • The taxpayer cannot use accrued losses as a counterbalance (other than house property loss).

Penalty for Late filing Income Tax Return - Effect From April 2018

For returns submitted after the deadline of July 31 but before December 31 of the relevant assessment year, a penalty of Rs. 5000 will be charged.
If an income tax return is submitted after December 31st, there will be a penalty of Rs. 10,000.
A reduced penalty of Rs. 1000 shall be applied to assesses having taxable incomes up to Rs. 500,000. I am mentioning some points what is Penalty for late filing of Income Tax Return.

Section 234A - Interest on delayed filing of Returns

The penalty shall be computed as interest charges in accordance with Section 234A. If any of the following apply to the taxpayer:

has not complied with any other requirements of the Direct Taxation rules and regulations, such as failing to complete Form 16 after changing employers.

Section 234B - Interest on delayed payment of Advance Tax

If the advance tax amount is less than 90% of the assessed tax, the taxpayer must pay interest in addition to the advance tax, as per Section 234B. The amount of penalty interest will be specifically increased under the following circumstances:

Advance tax payment is not made on time.
The advance tax has been paid, but not completely.

Section 234F - Penalty for late filing of Returns

Section 234F was introduced in the year 2018 which provided details on the penalty amount for delayed or late filing of Income Tax Returns. This penalty would be added to the existing interest charges (under section 234A) for delayed or late filing of IT returns. There are other sections available apart from Section 234 which are explained below:

Penalty for Late filing Income Tax Return - Applicable FY 2016-17

Taxpayers who file their income tax returns late may be liable to a penalty of Rs. 5000 under the previous restrictions, which were applicable for returns filed up until the FY 2016–17.

However, the Rs. 5000 fine for filing an income tax return beyond the deadline is not imposed automatically. The taxpayer must pay an Rs. 5000 penalty if an income tax officer issues a notice for filing an income tax return beyond the deadline. Therefore, the assessing officer’s judgement alone determines the amount of the penalty that should be assessed in connection with the late submission of income tax returns.

What is Penalty for late filing of Income Tax Return Interest​

The taxpayer is obligated to pay interest at a rate of 1% for each month or portion of a month that the income tax return was not filed on time or before the deadline. It is significant to note that filing an income tax return requires payment of all outstanding taxes. As a result, interest for late filing would be assessed starting on the day following the due date and ending on the day that the tax return was provided and the taxes were paid in full. I hope  you have read full article what is Penalty for late filing of Income Tax Return.

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