If a person is required to furnish a return of income under section 139 and fails to do so within the time prescribed in sub-section (1), he/she will have to pay interest on tax due.
i) Rs. 5000 if the return is furnished on or before the 31st day of December of the assessment year
ii) Rs. 10,000 in any other case
However, the late filing fee shall not exceed Rs. 1000 if the total income of an assessee does not exceed Rs. 5 lakh.
| E- Filing Date | Total income Below Rs 5,00,000 | Total income Above Rs 5,00,000 |
| 10th January 2020 | Rs 0 | Rs 0 |
| Between 10th Jan 2021 to 31st March 2021 | Rs 1,000 | Rs 10,000 |
Reduced Time for Revising Your Return
Let’s say you are filing your ITR and you end up making a mistake. Under the changed rules, you only have time till the end of the relevant Assessment year to make the change (for ITRs from FY 2017-18). Earlier, taxpayers had a 2-year long window to revise and resubmit an erroneous ITR. This has now been decreased to one year from the end of the financial year. Therefore, the earlier you file, the longer would be the window available with you for revising your returns to rectify errors if any.
Payment of Interest
If you do not file income tax returns on or before the due date, you would be required to pay interest at the rate of 1% for every month, or part of a month, on the amount of tax remaining unpaid as per section 234A. It’s important to note that one’s ITR cannot be filed if one hasn’t paid the taxes. The calculation of penalty will start from the date immediately after the due date which is usually 31 July of the relevant assessment year (For the current year i.e FY 2019-20, the due date is 10th January 2021 for individual taxpayers). So, the longer you wait the more you will have to pay.
Carry Forward of Losses is Not Permitted
If you have incurred any losses during the year say a loss under the head Capital Gains or any loss in your business, make sure you file your return within the due date. Not doing so will deprive you of carrying forward these losses to the next years for set off against income in future years.
Delay in Receiving Refunds
In case you’re entitled to receiving a refund from the government for excess taxes you have paid, you must file your return before the due date to receive the refund at the earliest.