Income Tax

Penalty for Late Filing of Income Tax Return – AY 2018 -19

The last date to file your ITR for the FY 2017-18 was 31 August 2018. Not filing your ITR on time can lead to a penalty, but there are also other consequences and inconveniences attached to the delay. Let us understand these in detail below.

1. Penalty for Late Filing u/s 234F

As per the changed rules notified under section 234F of the Income tax Act which came into effect from April 1, 2017, filing your ITR post the deadline of August 31, 2018, can make you liable to pay a maximum penalty of Rs 10,000. 
To break this down; if you file post 31st August but before December of this year (i.e. 2018), a penalty of Rs 5,000 will be levied. For returns filed after December 2018, penalty limit will be increased to Rs 10,000. However, as a relief to small taxpayers, the IT department has stated that if your total income is not more than Rs 5 lakh, the maximum penalty levied for delay will only be Rs 1,000.  

Late Filing Fee Details
E- Filing DateTotal income BelowRs 5,00,000Total income AboveRs 5,00,000
31st August 2018Rs 0Rs 0
Between 1st Sep 18 to 31 st Dec 18Rs 1,000Rs 5,000
Between 1st Jan 19 to 31st March 19Rs 1,000Rs 10,000

2. 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 March 2019 to make the change (for ITRs for FY 2017-18). Earlier, taxpayers had a 2-year long window to revise and resubmit an erroneous ITR, which 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.

3. Payment of Interest

If you do not file the income tax return 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 very 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 i.e. 31st July (For current year i.e FY 2017-18, it was 31st August). So, the longer you wait the more you will have to pay.

4. 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. Here, do note that this rule would not apply to losses from house property. Accordingly, if you have a loss under the head house property, even if you do not file your return within the due date, you can still carry forward these losses to future years.

5. 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. – If you have missed the due date to file your return, you can still file it before 31 Dec 2018 by paying a fee of Rs 5,000. If you are filing after 31 December 2018, you will have to pay a fee of Rs 10,000. Also to note that the time limit for filing a return late for FY 2017-18 expires on 31 March 2019.

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