Have you failed to file your ITR by 10th January do not worry you can still file it but with costs
The due date for filing of the Income Tax Return (ITR) for the financial year 2019-2020 i.e. assessment year 2020-2021 for general category of taxpayers and which covers majority of individual tax payers was 31st July 2020, was extended till 10th January 2021 is over. What are the consequences if you missed the bus and failed to file your ITR by the extended due date? Let us discuss.
Is due date also the last date of filing of the ITR?
People are generally under the impression that the due date is also the last date beyond which you can not submit your ITR, which is not correct. There are two dates relevant for ITR filing. One is due date and the other is last date. In case you failed to submit your ITR by the due date, you can still file it by the last date. The due date for submitting ITR for assessment year 2020-2021 was 10th January 2021 as extended from time to time but the last date is 31st March 2021. So due date is not the last date but a few consequences follow if you submit your ITR after the due date.
What happens if you miss the deadline?
In case you failed to submit your current ITR by 10th January 2021, you can still do so by 31st March 2021 but you lose your right to carry forward any losses for set off against the income of subsequent years. So in case you have loss under the head business income or capital gains or loss beyond two lakhs rupees under the house property head during the current year and which you are otherwise entitled to carry forward for set off in subsequent years, you will not be able to do so if you have missed the 10th January 2021 deadline.
In case the taxes paid by you or on your behalf are more than your tax liability and therefore you are entitled to get refund for the excess taxes paid, you will not be able to get interest in respect of such excess taxes paid for the period of delay which is attributed to you. In case there is shortfall in the taxes paid on your behalf against your aggregate tax liability, in addition to the interest for such shortfall, you will also have to pay interest for the period of delay in submitting your ITR even if you have already paid the shortfall after 31st March 2020. The interest for delay in filing of your ITR will apply from the original due date i.e. 31st July 2020 in case such shortfall is more than one lakhs otherwise the interest is payable from 10th January 2021.
Payment of late for filing of your ITR after the due date
In addition to the above consequences, you have to mandatorily pay late fee at the time of filing of your ITR if the ITR is submitted after due date as extended. In normal circumstance, you have to pay a late fee of Rs. 5,000/- in case the ITR is submitted by 31st December. However, for the assessment year 2020-2021 since due date itself is 10th January 2021 as extended, no late fee was levied in case you had submitted the ITR by 10th January 2021. However in case you file your ITR after 10th January 2021 but by the last date i.e. 31st March 2021, you will have to pay a late fee of Rs. 10,000/- in case your taxable income is more than five lakhs. The late fee is restricted to Rs. 1,000/- in case the taxable income is below Rs. five lakhs..
So in case you are required to submit your ITR for any reason like your gross total income over basic exemption limit or due to owning of any assets outside or you being a signatory to any account outside India of having spent on electricity or foreign travel beyond specified threshold limit, you will have to pay the late fee as discussed above in case you missed the bus and file ITR after 10th January 2021..
What happens if you fail to submit your ITR even by the last date?
In case you fail to file it even by 31st March 2021 the income tax department can levy a minimum penalty equal upto 50% of the tax which would have been avoided by you, in addition to the income tax and interest liability till the date you ultimately file your ITR in response to the notices from tax department.
Only a few people know that the government has powers to launch prosecution against you and put you behind bars if you do not file your ITR. The present income tax laws prescribe a minimum sentence of three years of imprisonment and a maximum of seven years. It is not that the department can launch prosecution against you in each instance of failure to file the ITR. The income department can launch prosecution only in case the amount of tax sought to be avoided exceeds Rs. 10,000/-.
The writer is a tax and investment expert and can be reached at email@example.com