What Is Section 234F Of The Income Tax Act? How To Pay The Penalty Online?
It is mandatory for all taxpayers to file their income tax returns within the prescribed time limit. To ensure the timely filing of income tax returns, the Income Tax Act introduced Section 234F in April 2018. This section deals with and prescribes the penalties that taxpayers must bear if they fail to file their ITR within a stipulated time limit. How much you need to pay as a fine will depend on how late you are in filing the returns. Moreover, authorities will consider your total yearly income when setting a penalty amount.
In such an instance, you need to know the provisions of Section 234F of the Income Tax Act, 1961.
What is Section 234F of the Income Tax Act?
Taxes are crucial for the smooth functioning of the entire country. Section 139 specifies a particular date in each calendar year as the due date for filing returns. Non-compliance to the due date can compromise the government’s ability to run the country and provide necessary services to its citizens.
The penalty under Section 234F is primarily a way to discourage taxpayers from delaying ITR filing. Keep in mind that you have to bear an interest payment on your taxes in case of delays. This interest is an added liability, which is separate from the Section 234F fee.
Before proceeding to learn more about Section 234F of the Income Tax Act, let’s take a look at the actual ITR due dates.
When is the Due Date to File ITR for AY 2022-23?
As per the Income Tax Act provisions, the Government of India has set July 31 2022, as the last date for filing ITR for salaried individuals. In the case of corporates or companies that require to have an audit conducted, the returns need to be filed by 31st October 2022.
Please do ensure to file your income tax returns by the set date to avoid any late fee or penalty.
Also Read: Income Tax Calculator FY 22-23: Usage, Tax Regimes, Tax Benefits And Exemptions
How is the Late Fee Calculated under Section 234F?
Here is a table explaining how many penalties you would need to pay in such cases of late payment this year.
| Income Range | Penalty |
| Rs. 2.5 lakh to Rs. 5 lakh | Rs. 1000 |
| Rs. 5 lakh or more | Rs. 5000 |
Taxpayers Falling under the Purview of Section 234F
Now that you know when the ITR filing due date is, you should also understand whether you come under the scope of Sec 234F. Listed below are some individuals or groups liable to bear penalties under this particular provision –
- Hindu Undivided Families or HUFs
- Individuals with taxable income
- Firms
- Companies
- AOPs
Thus, it is evident that Section 234F of the Income Tax Act applies to all groups or individuals who are liable to file taxes at the end of the financial year.
Individuals Exempt from Section 234F
Even though all taxpayers come under the rules of this particular section, the following three groups are the only exceptions:
- Individuals aged less than 60 years but with income not exceeding Rs. 2.5 lakh a year. If you fall in this group, you do not have any income tax liabilities, as per the ITA.
- Senior citizens (aged between 60 and 80 years) with an annual income of Rs. 3 lakh or less also do not need to pay taxes. Therefore, Section 234F penalties do not apply to them as well.
- Lastly, super-senior citizens or those aged over 80 years can claim a tax-free annual income of up to Rs. 5 lakh. In such cases, they do not need to file ITR, which means no late fee is applicable.
How To Pay Penalty under Section 234F?
Taxpayers must visit the NSDL website and choose Challan ITNS 280.
After that, they have two options through which they can clear this fine. These are as follows:
- They can report the penalty as a part of their total income tax due.
- They can mention this penalty amount under the ‘Other’ head.
Also Read: Income Tax: Allowances, Exemptions and Deductions
Final Word
Section 234F of the Income Tax Act ensures sizable penalties for taxpayers who fail to file ITR within a prescribed time limit. Such penalties act as a deterrent for individuals or groups who intentionally or unintentionally disrupt the entire tax collection in India. If you are a taxpayer, make sure you are aware of these penalties and provisions so that you can avoid such additional liabilities over your yearly taxes.
FAQs on Section 234F of the Income Tax Act
Apart from the relevant Section 234F fees, you would also need to bear an interest of 1%. You have to calculate this interest on your taxable income for every month of delay. Section 234A outlines such interest charges in detail.
Penalties under Section 234F are mandatory for any individual or group who misses the ITR due date. Only those with no taxable income in a given financial year do not come under the purview of this section.
Section 234F provisions are a relatively recent addition to the Income Tax Act. It came into effect from Assessment Year 2018-19 onwards. Previously, the government charged a penalty for delayed ITR filing under a different section, i.e., Section 271F.
December 31 2021, was the last day for ITR filing. However, the government has allowed individuals to bear these liabilities until March 31 2022. If you still fail to clear the dues by that time, the penalty may be more severe, depending on your income range. Those with income over Rs. 5 lakh would need to pay Rs. 10,000 as a penalty in such a case, instead of Rs. 5000.
Ans: A taxpayer will be liable to pay a penalty under Section 234F of Income tax Act only if he/she has not filed returns within the due date. If e-verification of ITR is done after the due date, provisions of section 234F will not be applicable, and taxpayers will not have to pay any penalty.
Ans: As per section 192 of the Income Tax Act, an employer is required to deduct TDS before crediting the employee’s salary if salary exceeds Rs. 2.5 lakh. In case an employer does not do so, he/she will be liable to pay penalty and interest under various sections of IT Act. Similarly, an employee must also make sure that TDS gets deducted on time or else the person must pay advance tax as his/her income. If individuals fail to do so, they will be liable to pay a penalty for non-payment of advance tax.
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This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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