What is belated ITR filing?

The income tax return (ITR) filing deadline, 31 July, has passed and over 58.3 million returns were filed for the Assessment Year 2022-23. While initial return filing was slow, the pace picked up as the deadline approached. Record 7.2 million returns were filed on the last day.

If you are one of those who didn't file an income tax return before the deadline, you can still file it on or before three months prior to the end of the relevant assessment year. So for the assessment year 2022-23, the last date to file the income tax return is 31st December 2022. Filing belated returns is the same as filing normal return, it’s just taxpayers need to select the option ‘Filed under Section 139(4) — After the due date’ under 'Part A – General Information'

However, the belated return filing comes at a cost. The taxpayer may have to pay a maximum penalty of Rs 5,000 for filing a belated return. If the total income is less than Rs 5 lakh, the maximum penalty levied is Rs 1,000. If there is a tax due, the taxpayer has to pay 1 per cent interest per month till the payment taxes. If taxpayer files beyond the belated return deadline of 31 December, the fine may go up to Rs 10,000.

Further, taxpayers cannot claim deductions if they file a belated return. Losses arising from capital gains or business or profession cannot be carried forward. However, the loss from housing property can be carried forward. Usually, a taxpayer's refund is calculated from the start of assessment year 1 April, but in the case of belated return, the refund will be computed from the actual date of filing a return. So, the eligible taxpayers have to forgo part of the refund amount.

If you are filing a belated return after 31 July, the tax department has reduced the time limit for e-verification to 30 days. Usually, for normal ITR filing, the verification deadline is 120 days. The taxpayer has to e-verify the return to consider it valid or authentic.

For serial non-filers or those who don’t file income tax returns at all, taxpayers may have to pay hefty fines or even an imprisonment in some cases.