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ITR Filing: What are the Consequences of Missing December 31 Income Tax Return Filing Deadline?

In the intricate web of financial responsibilities, missing the crucial December 31 deadline for filing Income Tax Returns (ITR) can unravel a cascade of consequences. As the clock ticks down, taxpayers need to be cognizant of potential penalties, interest accrual on outstanding taxes, and the snag in receiving timely refunds.

Unawareness: A Common Culprit

Often, individuals find themselves unknowingly entangled in the web of tax deadlines due to a variety of reasons. Notifications may go unnoticed, communications might be overlooked, or incorrect deadlines might be assumed, leaving taxpayers unaware of the impending December 31 deadline. Financial hardships can exacerbate the situation, hindering individuals from securing the necessary funds for professional tax assistance or covering potential tax liabilities, leading to inevitable delays.

The Aftermath of Missing the Deadline

The repercussions of missing the December 31 deadline are not to be taken lightly. Dr. Suresh Surana, Founder of RSM, underscores the potential consequences, stating that while taxpayers failing to meet the deadline may still file an updated return within 24 months from the end of the relevant assessment year, certain conditions apply. These conditions include cases where the updated return constitutes a loss return, a nil return, or instances of pending assessment, reassessment, search, survey, or prosecution proceedings.

Navigating the Aftermath: Revised ITR Filing

For those who find themselves on the other side of the deadline, there’s a lifeline in the form of filing a Revised Return of Income under Section 139(5) of the IT Act. This allows taxpayers to rectify errors, omissions, or wrong statements present in their original return of income.

Steps to File Revised ITR: A Roadmap to Compliance

  • Login to the Income Tax e-Filing Portal: Utilize your Password and PAN to access the portal at incometaxindiaefiling.gov.
  • Navigate to e-File: Click on the e-File option to proceed.
  • Select Assessment Year and Submission Mode: On the Income Tax Return Page, choose the Assessment Year and Submission Mode (online or offline).
  • Offline Filing: If opting for offline filing, specify Filing Type (Original, Revised, or Belated) and ITR Form (e.g., ITR-1, 2, 3). Upload the ITR in the required format.
  • Online Filing: For online filing, complete the return directly on the website.

Penalties and Taxes: The Price of Procrastination

While the option to file a belated return exists, procrastination comes at a cost. Taxpayers must be prepared to pay an additional tax of 25% of the aggregate of tax and interest payable under Section 140B of the IT Act. This additional tax can escalate to 50% if the updated return is filed after 12 months but within 24 months from the end of the relevant assessment year.

Monika Shanmugam