Belated Returns: Meaning, Types & Penalty For Late Filing
The Income Tax Act allows taxpayers to file ITR even after one has missed the due dates. In such a scenario, one can file belated returns as per the notification issued by the Income Tax Department. However, one will have to incur a penalty and other charges while filing belated returns.
What is a Belated Return?
Income Tax Department notifies the due date for filing ITR at the start of every assessment year. One can file returns within the due date under Section 139(1) of the Income Tax Act. When taxpayers miss out on these due dates, they can still file belated returns under Section 139(4) of the Income Tax Act.
Individuals opting for belated returns may have to pay penalties and interest charges along with their tax liability. Such penalties and charges depend on the tax slabs of the assessee. A person coming under a higher tax slab will have to pay a high penalty, whereas taxpayers in lower slabs are liable to pay lower penalties.
For AY 2022-23, the ITR filing due date for individuals and HUFs is July 31 2022. After that, they can file their belated returns till December 31 2022.
Also Read: Section 139 of the Income Tax Act: Provisions For Filing Different Types Of Returns
Types of Income Tax Returns
The following are the various types of ITRs:
- ITR 1 or SAHAJ
Individuals who earn income from salary, other sources (interest and dividend, etc.), only one house property and has total income of more than Rs. 50,00,000 are eligible to file ITR 1.
- ITR 2
Individuals and HUFs that do not carry out any business or profession under proprietorship can file ITR 2.
- ITR 3
Individuals and HUFs earning income from any business or profession under proprietorship are eligible to file ITR 3.
- ITR 4 or SUGAM
Individuals, partnership firms, and HUFs who are residents of India and earn income from business or profession may file ITR 4. Taxpayers who earn presumptive income under various sections of the IT Act can also file this form.
- ITR 5
The following entities may file ITR 5:
- Business trusts
- Associations of Persons (AOP)
- LLP and companies
- Artificial juridical persons
- Estates of any deceased
- Estates of insolvents
- Body of Individuals (BOI)
- ITR 6
Companies not claiming exemptions u/s 11 of IT Act may file ITR 6 should file ITR 6.
- ITR 7
Entities required to file ITR under Sections 139(4A), 139(4B), 139(4C), 139(4D), 139(4E), 139(4F) are eligible to file ITR 7
Penalty for Late Filing of ITR
Taxpayers opting for belated returns are liable to pay a penalty while filing belated ITR. The IT Department levies penalty under Section 234F of Income Tax Act. Until AY 2017-18, there was no provision for any penalty on belated returns. The government inserted Section 234F in IT Act through Finance Bill 2018.
Penalty for various tax slabs are as follows:
| E-Filing Date | Penalty if Total income is below Rs. 5,00,000 | Penalty if Total income is above Rs. 5,00,000 |
| Before due date | 0 | 0 |
| After due date | Rs. 1,000 | Rs. 5,000 |
Interest Levied on Filing Belated Returns
Apart from paying a penalty, taxpayers are also liable to pay penal interest on belated returns as well. The IT Department levies interest under Section 234A of Income Tax Act at the rate of 1% per month or part of a month on estimated tax liability.
The calculation of interest starts from just after the original due date till the date on which one files their ITR. It is important to note that interest calculation starts after the expiry of the original due date. For example, original due date for filing ITR for AY 2021-22 was July 31 2021. So, the Department will charge penal interest from August 1 2021.
Also Read: Income Tax Return Filing: Due Dates And Penalties
Limitations of Belated Returns
Apart from paying penalties and interest, taxpayers opting for belated filing of income tax returns may not be able to take advantage of certain carry forward facilities. Losses under the category “capital gain”, business/profession, and losses accrued from maintaining and owning a racehorse will not be allowed to be carried forward or set off from succeeding years.
Now, taxpayers are also eligible for refunds on excess tax deposited with the government. In case one is filing returns within the original due date, the Income Tax Department will compute interest on refund from the first day of the assessment year. However, in the case of belated returns, interest is computed from the date of filing the returns. Therefore, individuals may miss out on the part of interest due to late filing of income tax returns.
Final Word
Taxpayers always have an option to file belated returns in case they miss out on due dates. However, they must avoid this delay and file their returns within the due date to avoid monetary losses.
FAQs on Belated Returns
Ans. After filing income tax return, individuals may find that they have omitted or put wrong information in their ITR. In such cases, the Income Tax Department provides a facility of revised returns where they can make changes without incurring any penalty. Taxpayers can even revise a belated return u/s 139(5) of the Income Tax Act.
Ans. One needs to carry out e-verification of their returns within 120 days of filing ITR. If e-verification is not done, then tax authorities will not treat the returns as valid and will decline to process it. In such a case, IT Department may trigger penal provisions for non-filing of returns.
Ans. Taxpayers can claim refunds when they file belated returns. There is no restriction on refund claims. However, assesses may have to forgo a part of their interest on refunds while filing belated returns.
Ans. Tax audit is a statutory audit under Section 44AB of Income Tax Act. If the individual does not file TAR within the due date, they are liable to pay the penalty. The penalty charged will be the least of the following:
0.55 of total sales or gross receipts
Rs. 1,50,000
Ans. Taxpayers filing the wrong return may have to face certain consequences. The Department will consider these returns as defective under Section 139(9) of Income Tax Act. However, the IT Department provides taxpayers with the option to rectify their returns by filing a revised return.
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