All about penalty and charges for late filing of Income tax return

  • Setindiabiz Team
  • May 30, 2024

Income tax return filing is one of the most important compliances that each taxpayer must adhere to. Filing your income tax return within the deadline is always advisable as it can help avoid penalties, fines or prosecution involved in late filing. Depending upon the type or category of taxpayers, penalty for late filing ITR may vary from one entity to others. Go through the further post to gain insight into ITR filing charges and penalty for late filing ITR in India.

BRIEF SUMMARY
Income tax filing offers a number of benefits to the taxpaying entitties; be it an individual or business entity. Filing income tax return within the due date is necessary; failing to which may attract various penalties or (and) prosecution. ITR filing is a necessary compliance requirement for taxpayers and corporations. The taxpayers must be aware of the due date for filing their ITR registration so as to avoid penalty & charges for late filing income tax return which are an unnecessary financial burden.

What is the category-wise penalty for late or non-filing of Income tax returns?

Depending upon the type or category of taxpaying entity, the penalties for late filing or not filing income tax returns within the due date goes as below;

Salaried Individuals

They are divided into three categories as per their annual income range.
1. Total annual income below Rs. 2.5 lakh
If a salaried individual with salary below Rs 2.5 lakhs, fails to file his ITR within the due date for the financial year, no penalty is levied.
2. Total annual Income below Rs. 5 lakhs
Any salaried individual having salary upto or not more than Rs. 5 lakhs may have to face a penalty of below or uptoRs 1,000 in case of late filing of ITR. In this case, maximum penalty for late ITR filing can’t exceed Rs 1,000.
3. Total Annual Income above Rs. 5 Lakhs
Any salaried person with a total annual income above Rs 5 lakhs may have to face a penalty of up to Rs. 10,000 if fails to file ITR within the deadline or due date.

Self-Employed Individuals

For self-employed individuals, the amount of ITR filing penalty for filing after the due date is not more than Rs. 10,000.

Companies

Due to late ITR filing, companies may have to bear a penalty of up to Rs 10,000.

Senior Citizens

The ITR filing penalty under Section 234F is only applicable to senior citizens who meet the following criteria;
Aged between 60-80 years and total annual income not more than Rs. 3 lakhs.
Aged over 80 years with total annual income more than Rs. 5 lakhs.

Penalty under Section 271H

Those failing to file TCS or TDS statements within the due date have to pay a penalty ranging between Rs. 10,000 to Rs. 1,00,000 along with late ITR filing penalty under Section 234F. Under Section 234F, an ITR filing penalty of Rs. 200 per day is charged until TCS or TDS is paid.

Is late penalty levied on people below taxable limit for late ITR filing?

In general, no penalty is levied for non-penalty of ITR on individuals and corporations with their total income below the tax exemption limit. However, the Union Budget 2019 made amendments in the Income Tax Act which is effective from AY 2020-21, which mandates ITR filing for taxpayers meeting the following conditions despite not having a taxable income.
  • People who have made expenditure towards electricity consumption over Rs. 1 Lakh.
  • People who have a total deposit of more than 1 crore in one or more current accounts with a bank. 
  • Those who are Indian residents but are making income from foreign assets.
If you meet any of these or other conditions mentioned in the latest amendments of the Income Tax Act, you will have to pay the prescribed penalty for non-filing of ITR. As mentioned above, it applies even to those who do not have a taxable gross income.
Now you are aware of the conditions that make you liable for filing ITR, you should also keep some important points in mind.

Can one be imprisoned for not filing a tax return?

In case a taxpayer fails to file his income tax for an assessment year, he will get a notice from the Income tax department under Section 142 (1), 148 or 153A. Even after this notice, ITR is not filed, the taxpayer may face prosecution under Section 276CC of the Income Tax Act for tax evasion.
Some conditions in which a taxpayer may face imprisonment are as follows;
  • For possible tax evasion exceeding Rs. 25 lakhs: Penalty for not filing ITR plus imprisonment of at least 6 months, which can extend to 7 years. 
  • For other cases: Prescribed penalty with imprisonment of at least 3 months which can be extended to up to 2 years.

ITR registration & filing is among necessary returns for an individual as well as corporations. The key element to keep in mind is that always file your income tax return within the due date of the year as it will not only help ensure compliance to ITR filing but also sets you free from charges and penalty for late filing ITR or non-filing of ITR.

Gain knowledge about the penalties and charges for late filing of income tax return that one may have to bear in different conditions, with the above piece of writing!

Conclusion

FAQs

Q1: Do taxpayers have to pay the penalty for late filing ITR with interest under Section 234A?

Interest under Section 234A is charged only in cases where a taxpayer has any outstanding tax amount to be paid. Also, you cannot file ITR if you haven’t cleared all taxes in the first place. As a result, the penalty for late filing ITR does not apply here.

Q2: If I don't file my Income Tax Return after paying all the due taxes what consequences can take place?

After paying your taxes if you don’t file your IT returns then you may receive a notice of non-filing after the end of the relevant assessment year and late filing fees will be levied u/s 234F.

Q3: Is there an exemption for the senior citizen from the fees under Section 234F?

In general, no exemption of charges for late filing of income tax return (ITR) is granted for the senior citizens under Section 234F.

Q4: What are the ITR filing charges?

You can file your income tax return with minimum or sometimes free of cost. However, taking the help of an ITR professional or agency can be a beneficial move.

Q5: Is there any provision for installment payment or deferment of the late filing fee u/s 234F?

No, there is such provision for installment payment or deferment of the late filing fee under Section 234F. It needs to be paid in full.

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