Filing belated income tax return? Here's what you need to know

The deadline to file  income tax return (ITR) for the fiscal year 2020-21 has been extended to September 30, 2021. While it is never too early to file the return, filling belated return can cost you a penalty.

Furthermore, taxpayers have a misconception that if taxes are paid, they are free from additional obligations. However, missing the deadline for filing an ITR has legal ramifications. Let’s take a look at some of the consequences:

Consequences of late filling

-The assessee would be obliged to pay interest under section 234A at the rate of 1% per month on the amount of tax due.

-An income tax officer may impose a penalty of up to Rs 10,000 for late submission of a return under section 271F. However, if taxable income is less than Rs 5,00,000, the penalty is limited to Rs 1,000.

-Losses on capital gains and losses on business and profession shall not be carried forward.

– If the assessee is entitled to a refund, the tax department pays interest pursuant to Section 244A, a portion of which is lost due to the late submission of the return.

Benefits of filing your ITR on time

-If you are expecting a refund from the Income Tax Department, you should file your return on time to ensure that you receive your refund as soon as possible.

-Filling on time will ensure that you will benefit while applying for a vehicle loan (2-wheeler or 4-wheeler), a home loan, and so on.

-Also, income tax returns can be used to confirm your income and address – both of which are required when applying for a loan or visa.

Lastly, if a taxpayer fails to file his return by the due date, he may file a late return, also called a belated return. For the current assessment year, if the assessee fails to make his return on or before the due date, a belated return may be filed at any time before 31st January 2022.