ITR 2021-22: What do you lose if you file a belated income tax return?

Under section 234F of the Income Tax Act, 1961, the taxpayer is required to pay a penalty of Rs 5,000 for delaying the ITR and filing a belated ITR

The last date for filing the income tax return (ITR) for the financial year 2021-22 (FY22) or assessment year 2022-23 (AY23) is July 31, 2022. The government of India has clarified that there will be no extension to the deadline this year.

However, if you miss the ITR deadline, you can always file a belated ITR. A belated ITR can be filed till December 31, 2022. But under section 234F of the Income Tax Act, 1961, the taxpayer is also required to pay a penalty of Rs 5,000 for delaying the ITR.

Earlier, the maximum penalty for filing the belated ITR was Rs 10,000. It was reduced by half by finance minister Nirmala Sitharaman in her Budget 2021 speech.

Notably, this fine is only for taxpayers with an annual income of Rs 5 lakh or above. If the income is less than Rs 5 lakh per annum, the late fee is Rs 1,000.

What are the other disadvantages of missing the ITR 2021-22 deadline?

If you file a belated ITR, you are not eligible to carry forward the losses on income from capital gain, business and speculation. You can only adjust the losses from the sale of house property.

Also, the tax refund is only paid if the return is filed and duly verified.

On the timely filing of the ITR, the person is eligible to get an interest of 0.5 per cent per month on the refund amount. However, no such benefit is given in the case of a belated ITR.

If any dues are pending on the taxpayer's part, they will be liable to pay penal interest on it from the last day of filing the ITR. The interest amounts to 1 per cent per month on the due amount.

If an individual misses the December 31, 2022, deadline, they will also be unable to file the ITR unless the I-T department knocks at their door with a notice.