The Income Tax Return specifies the taxable income and tax liabilities of an individual, HUF, AOP, BOI, LPP, etc., if they are required to pay taxes. The ITR must be submitted to the Income Tax Department. Each financial year has a date the government declares for submitting the Income Tax Return. Filing income tax returns has numerous advantages. However, failure to file an ITR if you have taxable income will result in heavy penalty fees, interest payments, and other negative consequences.

Due date for filing ITR

The government assigns a deadline for ITR filing for every assessment year.
For the assessment year 2022-23, the due date for ITR filing by Individual / HUF/ AOP/ BOI was 31st July 2022; for businesses, it was 31st October 2022, and for businesses requiring transfer pricing report was 30th November 2022.

Penalty for missing the ITR filing deadline

Late fee payment

According to Section 234F of the Income Tax Act, taxpayers with an annual income of more than 5 lakh rupees are required to pay a late fee of 5000 rupees if they miss the deadline for submitting their ITR. If a taxpayer does not submit their Individual Tax Return (ITR) by the 31st of December of the assessment year but submits it by the 31st of March of the assessment year, then this late fine could increase to Rs. 10,000. If one misses the deadline for submitting their ITR and their yearly income is less than 5 lakh Indian rupees, they will be required to pay a late fee of 1000 Indian rupees.

Payment of interest

If an entity fails to file an ITR by the due date and has outstanding unpaid tax, then the entity will be charged simple interest at the rate of 1% per month on the amount of outstanding unpaid tax commencing from the missed due date of the ITR filing. This interest will accumulate starting from the missed due date of ITR filing.
Suppose your tax obligation is Rs.50,000 and you pay the money 3 months after the due date, then you would be required to pay 3% of the amount, which comes to Rs.1,500, as interest for the late fee payment.

Prosecution for not filing ITR

If the Department of income tax discovers that you evaded taxes by not submitting your ITR, then you also encounter the possibility of receiving a sentence of imprisonment. If you fail to submit your income tax return as the law requires, you suffer a potential prison sentence of a minimum of three months and a maximum of seven years.

Adjustment of loss

You can "carry forward" losses if you have losses from the stock market, property, mutual funds, or any of your businesses and compensate them with revenue from the following year if you want to do so. Your overall tax burden will be lowered as a result of this. You are only eligible for a loss adjustment if you declare the losses on your income tax return (ITR) and submit it before the deadline for submitting your ITR.

Hence, people must fill out their ITRs, list their income and assets, and pay their taxes by the due date as per the requirement of law. As citizens who pay taxes, it is essential that we keep a close eye on any changes to the tax rules and the deadline declared by the Income Tax Act. The government specifies the date for filing an income tax return every year. If the taxpayer does not do it, it can lead to income tax fines and even criminal charges against the taxpayer.