Individual taxpayers had until the December 31, 2021 to file their ITR. If you have missed it. You’ll have to submit a belated tax return.
Taxpayers who missed the December 31 deadline for filling their ITR have a few more months to file what is known as a “belated return.”
According to Section 139(4) of the Income Tax Act, the deadline for filing belated returns is March 31, 2022.
There is a penalty for filing a late return. Section 234F of the IT Act imposes a late charge if a return is not filed within the time limit for any AY.
It is 1,000 for people with a total income of less than 5 lakh rupees, and 5,000 for those with a total income of more than 5 lakh rupees.
A late fee is not charged to some taxpayers.
According to the IT legislation, those with gross total income less than the basic exemption threshold are not required to pay a late fee for filing their tax returns beyond the due date.
However an individual earning less than the basic income threshold but has income from overseas assets will be subject to a late filing penalty.
Apart from the penalty imposed by the IT department, there are further implications. The first is the failure to pay refunds on time.
Second is Interest on refund is allowed from the date of filing the return of income to the date on which the refund is granted if the return is filed beyond the due date.
Most losses cannot be carried forward.
If an ITR is submitted late, Section 80 of the I-T Act states that no losses can be carried forward for set-off purposes, with the exception of losses under the heading House Property and unabsorbed depreciation.
Under Section 139(1) of the IT Act, any business loss (except unabsorbable depreciation) or speculative loss must be claimed by submitting ITR by the stipulated due date.
However, such carry forward restriction only applies to the year in which such loss was incurred, not the year in which the loss was claimed.
Make sure you don’t miss the March deadline.
If you miss the March 31, 2022, deadline, you will not be able to file an ITR voluntarily. It can only be submitted in response to a tax department notification.
The IT department has the authority to impose a minimum penalty of 50% of the tax payable. The department may also impose interest at a rate of 1% each month or portion of a month
until the ITR has been submitted. The authority is also empowered to collect a penalty under Section 234 beginning April 1, 2021.