Consequences of Missing July 31 Deadline For ITR Filing
In New Delhi: For the fiscal year 2021–2022 or assessment year 2022–2023, income tax returns (ITRs) must be filed by July 31st, 2022. It’s fine if you have already submitted the return or if you are able to do so before the deadline. But what happens if you don’t submit the ITR by the deadline of July 31?
If you miss the July 31 deadline, you still have until December 31, 2022, to file the return. However, there will be a late fee. There will be additional financial repercussions as well.
Late Fees will be charged
For taxpayers with an annual income up to 5 lakh rupees, there is a 1,000 rupee late fee. The late fee is 5,000 if your annual income is greater than 5 lakh rupees.
Know about Exemption Limit
The basic exemption threshold is determined by the income tax regime you select. For taxpayers under the age of 60, the basic tax exemption limit under the previous income tax system is set at 2.5 lakh. The basic exemption threshold for people aged 60 to 80 is set at 3 lakh. The exemption threshold for people over 80 is set at 5 lakh.
The basic tax exemption limit is 2.5 lakh rupees under the new concessional income tax regime, regardless of the taxpayers’ age.
Gross total income is the amount of income before any deductions allowed by sections 80C through 80U of the Income Tax Act.
Consequences of Interest on late tax payment
Missing deadlines have many consequences in addition to the late fees. You will have to pay interest on the late tax payment if you miss the deadline.
“While filing an ITR, there may be some tax due on things like interest and dividends. TDS deducted at 10%, but you are in the 20% or 30% tax bracket, so the difference in tax must be paid with interest in accordance with Section 234A at a rate of 1% per month “declaring Sudhir Kaushik, CEO and Co-Founder of TaxSpanner.
You can just deposit the unpaid tax if you file the return before the deadline. However, if you miss the deadline, you will be required to retroactively deposit the unpaid tax and interest as of July 31. The interest for the entire month must be paid at a rate of 1% per month if the unpaid balance is paid after the fifth day of any given month.
Carried forward losses will not be allowed
By adjusting losses from business operations or the sale of property against other incomes, a taxpayer can lower their liability. The ITR must be submitted prior to the deadline in order for the losses to be carried forward.
“If the due date is missed, you are not permitted to carry forward losses (other than losses from house property). Losses on sales of real estate, stock, and other capital assets that were forced to be sold during the Corona should be reported and filed prior to the deadline “said Sudhir Kaushik, co-founder and CEO of TaxSpanner.
According to the Income Tax Act, business losses (aside from speculative losses) may be offset against any head of income, with the exception of salary income. Any unadjusted loss may be carried forward for a maximum of eight fiscal years following the current fiscal year and offset against any permitted business income. For instance, business losses in the fiscal year 2020–21 may be offset by business gains in the fiscal years 2021–22 and later.
Notice on failure to file income tax return or mismatch found
The Income Tax Department may give you a notice for failure to file or mismatch.
Kaushik commented on the potential for a notice from the Income Tax Department “As we can see from the ITR and AIS(Annual Information Statement) filings, many people invested in equity during the Covid pandemic. As a result, tax notices for discrepancies in declared income or loss are also possible.”
How to file income tax return if missed the due date
In the event that you miss the July 31 deadline, the deadline for submitting a late income tax return for the fiscal year 2021–2022 is December 31, 2022.
You must file an appeal for forgiveness with the commissioner of income tax of your ward for refunds and losses carried forward if you miss even the deadline of December 31, 2022, for refunds and losses. Kaushik advised, “If the justification is legitimate, you might be granted permission.
Huge Penalty on owe taxes
When you owe taxes, there is a severe penalty. “You have to pay 50% additional tax of this outstanding tax amount if filing updated return within a year and 100% additional tax if filing after one but before two years,” he said. “If you uncover new income in AIS or other papers which were not reported in original return or not filed at all.”
ITR U – New form to file an updated return
In the event that you miss the deadline of December 31st, a new form, ITR U, must be used to file an updated return and provide justification for updating your income. The following are some possible causes: previously unfiled returns; income that was not reported accurately; incorrectly selected heads of income; reduction of carried forward losses; reduction of unabsorbed depreciation; reduction of tax credits under Sections 115JB and 115JC; incorrect tax rate and others.
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