ITR filing: The Income Tax Department has set July 31 as the deadline to file the Income Tax Return (ITR) for the financial year 2023-24. As the clock ticks down to the final hours of the ITR filing deadline, the government has made it clear that an extension is unlikely, despite widespread speculation and demands from various quarters. This year, as in the previous year, many taxpayers are hoping for a last-minute reprieve, but officials have indicated that the deadline will remain firm. Last year, a significant number of taxpayers were caught off guard when the deadline was not extended, leading to a rush of last-minute filings and subsequent penalties for those who missed the cutoff.
ITR filings surge by eight per cent
In a significant boost to the country's tax compliance, more than five crore people have filed their Income Tax Returns (ITRs) as of July 26, marking an eight per cent increase from the previous year, as per official data. On July 26 alone, tax authorities received an impressive 28 lakh ITRs, highlighting the last-minute rush among taxpayers to meet the deadline. The increase in filings is part of a broader trend observed over the past few years, with official data indicating a steady rise in the number of individuals submitting their tax returns. For the fiscal year 2022-23, a total of 7.4 crore people filed their ITRs, compared to 6.75 crore in FY2020-21. This upward trend points to a positive shift in tax compliance and the expanding tax base in the country, which is crucial for the government's revenue collection efforts and economic planning.
What happens if you miss ITR filing deadline?
Individuals who fail to meet the July 31 deadline for filing their income tax returns can still submit their returns, but they will face a late fee penalty. This penalty, known as a belated return fee, is governed by Section 234F of the Income Tax Act, 1961. The final date to file a belated return for the financial year 2023-2024 is December 31, 2024. Penalties for late filing can reach up to Rs 5,000. However, for smaller taxpayers with an income not exceeding Rs 5 lakh, the penalty is capped at Rs 1,000. It’s important to note that this penalty applies regardless of whether any tax is due. In addition to the late fee, individuals will also incur interest on any unpaid taxes, which accrues from the original due date until the full amount is paid.
There are significant drawbacks to filing a belated return. Taxpayers will be unable to carry forward losses from capital gains, business income, and other sources, with the sole exception of losses from house property. Furthermore, late filers risk the option to choose between the new and old tax regimes. This could be particularly disadvantageous for those with higher income and deductions who would benefit from the old tax regime, as switching to the new regime might increase their tax liability. Late filers may also need to pay interest on any outstanding tax amounts.
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