HomeWhat's TrendingKnow this to Avoid Penalty of ₹ 5000 and Interest as Last...

Know this to Avoid Penalty of ₹ 5000 and Interest as Last Chance to File ITR Approaches for AY 2023-24

As the final weeks of 2023 unfold, taxpayers are urged to prioritise a critical financial obligation—filing their Income Tax Returns (ITR) for the assessment year 2023-24. The looming deadline of December 31, 2023, is the last opportunity for taxpayers to fulfil this obligation without incurring penalties and interest, making it imperative to act swiftly to avoid unnecessary financial burdens.

Penalties for Late Filings:

Section 234F of the Income Tax Act stipulates penalties for late ITR filings. Failing to file before the December 31 deadline may result in a penalty of ₹ 5,000. However, individuals with an income not exceeding ₹ 5 lakh will face a reduced fine of ₹ 1,000. Acting promptly is crucial to circumvent these penalties and ensure a smooth financial transition into the new year.

Interest Implications:

Late filings also attract interest under Section 234A, with taxpayers obligated to pay 1 percent interest on the unpaid tax amount for each day of delay. Awareness of these consequences underscores the importance of adhering to the December 31, 2023, deadline to avoid accruing additional financial liabilities.

Plan for the Future:

If the December 31 deadline is missed, taxpayers have a 24-month window until March 31, 2026, to file their ITR, albeit with additional penalties and interest. However, reclaiming paid taxes through an updated return is not an option, emphasising the significance of timely compliance.

Seeking Condonation of Delay:

In exceptional circumstances where the deadline is unattainable, taxpayers can seek condonation of delay under Section 119 by communicating reasons for the delay to the tax department. It is important to note that a fine of ₹ 10,000 and 1 percent interest may be imposed in such cases.

Consequences of Non-Compliance:

Failure to file ITR can lead to proceedings under Section 276CC of the Income Tax Act, with punishments ranging from rigorous imprisonment to fines. To avoid complications in the future, taxpayers are strongly advised to submit their returns before the stipulated deadline.

The impending deadline for filing income tax returns necessitates immediate action from taxpayers. Meeting the December 31, 2023, cutoff is essential to avoid penalties, interest, and potential legal consequences. Proactive measures taken now will ensure a smoother financial journey into the new year, providing peace of mind and financial security for individuals and businesses alike.

Monika Shanmugam