Paying taxes is only the first step; you must also document the income earned and taxes paid in a financial year by duly filing your income tax return (ITR). Filing an Income Tax Return (ITR) is not just a formality, but a responsibility. So, what actually happens if you miss the ITR due date? Besides losing peace of mind, missing the ITR deadline can result in penalties/fines. Whether you forgot, postponed, or didn’t know how to file ITR, the consequences can vary from hefty fines to potential legal troubles. This blog post will educate you on all you need to know about late ITR filing and the penalties or risks of filing your ITR late.
What happens when you miss the ITR deadline?
Filing an ITR is a legal obligation for every taxpayer, with the Income Tax Department setting a clear deadline for ITR filing. For instance, the last date to file your ITR is 31st July 2025 for the financial year 2024-25. However, different taxpayer categories have different ITR filing deadlines:
| Category of Taxpayer | ITR Filing Due Date |
| Individuals not covered under tax audit | 31st July 2025 |
| Individuals/Businesses covered under tax audit | 31st October 2025 |
| Businesses requiring transfer pricing reports | 30th November 2025 |
| Filing revised or belated tax returns | 31st December 2025 |
If you miss these deadlines, the consequences could vary from a late income tax return penalty to legal troubles depending on the severity of the situation.
Penalties
According to Section 234F of the Income Tax Act, if you miss the ITR filing deadline, you will have to pay a late filing fee. However, the amount depends on the timeline of the ITR filing and your income. Here are the details.
- If you file after the due date (31st July) but before December 31, you must pay a penalty of ₹5,000.
- If you file after December 31, the penalty increases to ₹10,000.
- For taxpayers with a total income below ₹5 lakh, the late fee is limited to ₹1,000.
Payment of Interest
In addition to penalty, defaulters have to pay interest under Section 234A for the delay in filing. So, if you miss the ITR deadline and owe ₹10,000 or more in taxes, you will be charged 1% interest each month until you pay the amount. This can become a huge financial burden and make the tax filing process more complicated and troublesome.
Penalty under Section 271H
If taxpayers fail to file their TCS (Tax Collected at Source) or TDS (Tax Deducted at Source) returns on time, they will be penalized under Section 271H. The penalty can range from ₹10,000 to ₹1,00,000 depending on the delay and circumstances. Besides, a fine of ₹200 per day will be charged until the TCS or TDS return is filed under the provisions of Section 234E. To avoid paying a hefty fine for non-compliance, ensure that you file your ITR on time as even a short delay could lead to hefty fines.
Other consequences of late ITR filing
Aside from penalties and interest, late ITR filing has other consequences. Let’s look at some of them:
Delayed refunds
If you are eligible for a tax refund, filing an ITR after the deadline of 31 July can delay the refund process. The refunds will be processed only after submitting the return, so a delay on your part in filing the ITR will lead to delayed refunds.
Impacts your eligibility for loans
ITR late fee might not be a big deal if you are financially stable. However, it is not just the fine that you have to worry about. Late filing of ITR could potentially make it difficult to get loan approvals. Financial institutions often demand ITR receipts to process loan applications. Thus, a delayed ITR impacts one’s credibility, and banks or financial institutions may view it as irresponsible.
Loss of carry forward benefits
Filing ITR on time is important if you want to carry forward specific losses to future financial years. If you miss the ITR deadline, you won’t be able to carry forward losses from:
- Capital gains: Losses from selling assets like stocks, real estate, or mutual funds.
- Business or professional income: Losses incurred in your business or professional work.
Loss of deductions and exemptions
Filing an ITR after the due date can result in loss of deductions and exemptions under various sections of the Income Tax Act. For example, tax exemptions for investing in tax-saving investments like LIC, PPF, health insurance premiums, and education loan interest may be forfeited if the ITR is not filed on time.
Steps to file your belated return online
Even if you missed the deadline to file your income tax returns, you can still file your tax returns. However, this might entail a fine or a penalty. Let’s look at the steps involved in filing belated ITR returns:
Step 1: Visit the Income Tax e-filing portal
Step 2: Log in to your account on the e-filing account. If you are a new user, complete the registration process.
Step 3: Click on the ‘e-File’ tab, select ‘Income Tax Return’, and select the relevant assessment year.
Step 4: Select the mode of filing as ‘Online’ followed by ‘Start new filing.’Â
Step 5: Select the applicable status. For example, individual, HUF, or other.
Step 6: Select the appropriate ITR Form, for example, ITR-1, ITR-2, etc.
Step 7: In the ‘Filing Type’ section, select 139(4) ‘Belated Return.’
Step 8: Fill in details like income, deductions, and tax payments accurately.
Step 9: Carefully review the details and submit your return. Pay the applicable late fee or any outstanding taxes due.
Why is it important to file a belated return?
If you missed the July 31 deadline, you can still file a belated return to stay compliant and avoid the risk of not filing. Although late filing may lead to fines, it’s definitely a better option than skipping it entirely.
Conclusion
Filing your ITR before the deadline is crucial to avoid late filing penalty, maintain financial stability, and to ensure a stress-free tax filing experience. Failing to file the ITR before the due date can lead to penalties, interest payments, and additional fines. Beyond financial penalties, it can also impact your financial record and eligibility for future loans or credit. Filing your ITR on time is advisable to avoid unnecessary stress and extra paperwork. However, if you cannot file the ITR on time due to unavoidable circumstances, you can always file a belated return. The important thing is to stay compliant with tax rules as directed by the Income Tax Department of India. So, plan properly, file your ITR on time, and keep your financial record clean.
