ITR

How to file Income Tax Return after the due date?

In this blog, you will learn about what filing an income tax return would mean for a taxpayer and the multifarious benefits of furnishing ITRs timely.

The hubbub around the filing of an Income Tax Return, after the due date, is lawful and quite understandably obvious. Usually, Income Tax Returns in India need to be filed before 31st July for individuals and non-audit cases, and 31st October for audit cases of the relevant assessment year. 

The provision of belated returns is observed as the last chance to file an income tax return voluntarily, which is- three months before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier, and anything after that could spell trouble for the party.

As the name suggests, a belated return is the one filed after the asseverate date mentioned under income tax rules.

What to do in the event of missing a due date in filing the ITR?

However, there’s ample respite too, and a delay might not immediately and inexorably attract a penalty. Filing a Condonation of Delay is a relief to an individual or party who fails to file an appeal or suit in a limited time period called the Limitation Period. Section 5 of the Limitation’s Act of 1963 observes that the Court may choose to accept the party’s Condonation of Delay appeal, provided they can procure apparent causes and circumstances that are deemed excusable according to the ordinance of the Court. 

To ensure timely filing of returns and avoid collision of dates among the jamboree of assesses in the country, the tax department of India has defined some varied last dates up to which a person can file the return, depending upon their category- viz. 

  • Individual, 
  • HUF, Firm, LLP
  • The company, Trust and 
  • AOP/BOI, and audit applicability. 

For example, for the FY 2021-2022 

  • An individual and HUF (professionals or individuals, small businesses with non-audit cases) date of filing return of income is 31st July 2022. Since most audit reports are due to be filled by 31st September 2022, audit-requiring partner cases are to be filed by 31st October 2022. 
  • Companies, trusts, and political parties are too expected to file their return of income by 31st October 2022 for their accounts to be audited. 
  • In special cases, recently due to the pandemic, for example, due dates are relaxed to three months (31st December) before the end of the Financial Year (31st March). 

There is a provision to submit a revised file of return of income in case it comes to the assessee’s notice that there has been some error or wrong data included in the same.

The government demands taxpayers to file the ITR until the end of the assessment year (AY) relevant to the financial year (FY), unless extended. A generous four-month window to is opened for a tax return file that merely takes minutes, for the party to consolidate the income details for the financial year. The annual record of one’s income, tax liability, tax paid, and investments for the relevant financial year are collated and submitted to respective authorities in the Income tax return file

Condonation of Delay

Additionally, still, if a taxpayer, for reasons known to him, happens to miss his due dates to file the income tax return, a Condonation of Delay filed by him could be accepted by the court on some pre-determined grounds. For example,

  • subsequent changes in the law, that may have caused discrepancies in understanding and filing the return. 
  • Imprisonment or illness of the party filing the ITR, 
  • delay because of the awaited settlement of the writ petition, 
  • the party belonging to a minority group suffers a dearth of funds or is illiterate
  • the party is a Pardanashin woman.

In the event of a Company filing for Condonation

For a company filing its Condonation of Delay, a board meeting is set up of members of the company who pass the resolution that ought to be kept before the Central Government.

This could also be facilitated by bypassing the resolution by circulation and is imperative for the consideration and approval of the condonation of delay by the Central Government.

Next, the Company Secretary/ the Chief Financial Officer/ the Director or any such practising professional/officer of the company is expected to appear before the Ministry of Corporate Affairs, along with an application of reasons of delay and relief sought. 

Filing of Condonation of Delay with the Central Government in form 16 CG-1 should also include other relevant documents, and a letter of authorisation, alongside the true copy of the board resolution authorizing filing the application and appointing an authorised representative. 

Hereby, the Central Government may analyse and scrutinize and issue its final order of acceptance or rejection of the application. 

Prosecution

Filing an Income Tax Return isn’t possible without first paying tax. The longer one waits, the longer he plays. There are multiple set-offs or consequences, of not filing an Income Tax Return on time. Paying taxes, a common misconception among people isn’t enough, missing a return deadline more often than not, comes with legal consequences. A belated return of the ITR (for example, for the financial year 2021-2022, if the due date of 31st July is surpassed, then it should be filed before 31st December) would still reckon a penalty of Rs 5000, for late filing. However, for taxpayers earning up to 5 lakhs, there is a relief that amounts to a penalty of Rs 1000.

Losing out on major ITR filing benefits

  • One loses out on the major benefits like easy approval of loans (Vehicle loans, House loans, Personal loans, etc.), getting refunds processed quicker and easier for extra amounts of tax paid by error. 
  • One shall also not be able to avail of the easy way to submit address and identity proofs required at the time of applying for visas and loans. Most consulates and embassies need true copies of tax returns of at least the previous two years before approving visas. 
  • Penalty and prosecution are one of the most unpleasant ramifications, which could be completely evaded by filing the Income Tax Returns on time, a work that hardly takes ten minutes. 

Conclusion

One could be reprimanded more seriously if they willfully fail to file a return, even after several issued notices. Imprisonment for three months could be extended up to two years to seven years if the tax one owes to the department is higher. Besides the penalty, one may be imposed a 50% of due tax on under-reported incomes.

Losses won’t be allowed to be set off or carried forward in the coming years, refunds and return process of extra taxes shall be delayed and interests may be charged- under Section 234A at 1% per month or part thereof on tax due until the payment of taxes. Filing of returns: https://incometaxindia.gov.in/Pages/tax-services/file-income-tax-return.aspx, hence, is reflective of the ideal and responsible behavior of citizens who are mindful of their societal contributions.

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