Income Tax News: Filing your Income Tax Return (ITR) on or before the due date is not just a legal responsibility but also crucial for smooth financial planning. Missing the deadline can lead to multiple consequences that directly impact both individuals and businesses.
What Happens If You Fail To File Your ITR On Time?
- Late Fee & Penalties
Under Section 234F of the Income Tax Act, a penalty of up to ₹5,000 can be imposed if the return is filed after the due date but before December 31 of the assessment year. If the income is below ₹5 lakh, the maximum penalty is ₹1,000. - Interest on Tax Due
If there are pending tax liabilities, interest under Sections 234A, 234B, and 234C will be levied until the tax is paid. This increases the overall outgo for taxpayers. - Loss of Carry Forward Benefits
If you miss the deadline, you cannot carry forward certain losses (like business loss or capital loss) to set them off against future income, which could increase your future tax burden. - Refund Delays
Filing late may result in delays in processing your return and receiving any eligible refunds. - Scrutiny Risk
Consistent failure or delay in filing can increase the chances of your profile being flagged for scrutiny by the Income Tax Department. - Legal Consequences
In extreme cases, willful failure to file returns can attract prosecution, with fines and even imprisonment depending on the severity. - Legal ConsequencesIn serious cases, deliberate non-filing of ITR can lead to prosecution. Depending on the tax amount involved, penalties may include hefty fines or even imprisonment of up to seven years.
The Income Tax Department repeatedly advises taxpayers to stay compliant
- Timely filing of returns ensures financial discipline, faster refunds, and smooth access to loans and government services. The Income Tax Department repeatedly advises taxpayers to stay compliant, as on-time filing not only avoids penalties but also strengthens financial records for the future.
The Income Tax Department encourages taxpayers to file on time to avoid these repercussions. For individuals and businesses alike, timely compliance ensures financial discipline, easier access to credit, and peace of mind.
