Late Submission of ITR Filing Resulting in Penalties and Other Repercussions

The ITR filing date for the applicable fiscal year is always July 31, if not postponed. The government gives taxpayers four months for each assessment year (AY) to correctly consolidate their Income Tax Information for the applicable fiscal year and file their Income Tax Return (ITR) is not extended; the window opens on April 1 and closes on July 31. If taxpayers don’t finish their returns before the deadline, they may be subject to one number of penalties.

● Financial penalty: Those who fail to submit their returns by the deadline may still do so after it has passed. However, they will be subject to a maximum penalty of Rs. 5000 (for late ITRs filed after July 31.
● Penal interest: If there is any unpaid tax debt, penal interest will be assessed on the amount, depending on the individual’s circumstances. However, even in the case of late ITRs, no interest must be paid if no taxes are owed.
● Prosecution: The penalty for offenders is imprisonment for three months to 2 years and for tax evasion amount greater than Rs. 25 lakhs, imprisonment for six months to 7 years.

Within 24 months of filing, you may update any prior returns using the updated return form, ITR-U. ITR U was created to help taxpayers better complete tax laws without resorting to legal action.

Does ITR-U Carry any Penalties?

There is no fee for filing an ITR-U. But under Section 140B, an additional tax must be paid. Depending on whether the ITR-U is filed within 12 or 24 months of the conclusion of the pertinent assessment year, the extra tax is either 25% or 50% of the tax and interest owed.

ITR-U Submitted	Additional Tax
12 months after the conclusion of the relevant AY	25% more in tax + interest
24 months after the conclusion of the relevant AY	50% more in tax + interest

Conclusion:

ITRs filed beyond the deadline may incur heavy fines and additional drawbacks. You must file your ITRs on time to prevent these issues. If you can’t file your ITR by the deadline, you should immediately speak with a tax expert to review your choices. Depending on your situation, there could be methods to decrease or even eliminate the late filing penalty. So, don’t worry. You can avoid legal penalties through the ITR-U form.