Individuals who have not yet submitted their income tax returns for the fiscal year 2022–2023 ought to act right now. December 31, 2023, is the last day on which people can fulfill this duty. Nevertheless, there are fines and interest associated with late Filing if this deadline is missed. Understanding the ramifications and the importance of timely filing is therefore essential.

Interest and late filing fees

July 31, 2023, was the first deadline for filing income tax returns for the assessment year 2023–2024 (fiscal year 2022–2023). Those who missed this cutoff date now have until December 31 to file their ITRs.

It is crucial to understand that all taxpayers, including individuals, organizations, those subject to audits, and those not, are subject to the December 31 deadline.

Individuals who do not file their returns by the deadline will be charged a late filing fee in line with Section 234F of the Income Tax Act. The fine for individuals who failed to meet the deadline is ₹5,000. Nonetheless, taxpayers will only be required to pay a lower penalty of ₹1,000 if their total income stays below ₹5 lakh.

In addition, interest under section 234A will be assessed to a taxpayer for late filing of their return. The amount of unpaid tax is used to calculate this interest, which is calculated at a rate of one percent for each month or portion of a month.

The penalties for not filing

If ITRs are not filed at all, there may be serious repercussions. Losses from the current assessment year cannot be carried over by taxpayers, and non-compliance may result in fines. Depending on the degree of non-compliance, penalties might vary from fifty percent to two hundred percent of the tax that was charged.

Updated return option

Taxpayers may still submit an amended return within 24 months of the conclusion of the applicable assessment year, even if they missed the December 31 deadline. This provision was added by the Finance Act of 2022 to give an extension for filing income returns. Nevertheless, there will be more income tax due upon filing an updated return. Updated returns are filed without penalty or cost. However, Section 140B of the Income Tax Act requires taxpayers to pay additional tax.

Conditions for submitting amended returns

The ITR forms for the relevant assessment year that were notified must be used by taxpayers to file their revised returns. This needs to be completed in addition to the ITR-U form. It is significant to remember that amended returns cannot be filed in order to receive a refund of taxes. Taxpayers who wish to file refund claims must follow the initial filing deadline.

Read More: Income Tax Deductions Under Old Tax Regime for FY 2023-24

Potential for legal action

It is possible for delinquent taxpayers to face prosecution in serious circumstances with large-value differences. In order to stay out of legal trouble, it is imperative that tax filing requirements be met.

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