Belated Income Tax Return: Penalty, Time Frame & Consequences

Belated Income Tax Return: Penalty, Time Frame & Consequences: A belated return is a term used for a tax return that is filed after its original due date. You have a specific window of time within which you can submit a belated return. This window is calculated as follows:

  • You can file a belated return up to 3 months before the relevant assessment year ends.
  • Alternatively, you can file a belated return before the assessment process for your return is completed, whichever comes first.

If an individual doesn’t file their income tax return by the set deadline (31st july for A.Y. 2023-24), there’s still an opportunity for them to do so. Under the provision called Section 139(4) of the Income Tax Act, they are allowed to submit a late or ‘belated’ return. This can be filed either up to 3 months before the conclusion of the relevant assessment year or before the formal tax assessment is finalized by the authorities, with the deadline being whichever of these two events happens first.

What is Belated Income Tax Return?

When an income tax return is not submitted by the designated deadline, it is considered a belated return. When you’re required to file an income tax return and you don’t submit it on or before the scheduled deadline, it’s referred to as a “belated return.” In other words, if you miss the original due date for filing your tax return, the return is considered late or delayed, and this lateness is termed as a “belated return.”

For Example: 

Individual Name: Ram
Original Due Date:  July 31, 2023
Assessment Year: 2023-24

Example Scenario:
Ram, an individual taxpayer, needs to file his annual income tax return for the assessment year 2023-24. The original due date for filing the return is July 31, 2023.

Original Last Date: July 31, 2023
Ram’s Action: Unfortunately, Ram was unable to complete and submit his tax return by July 31, 2023.

In this instance, Ram’s income tax return would be considered belated since he missed the initial deadline of July 31, 2023. Even if Ram submits his tax return after July 31 but within the allowable window, it will still be classified as belated.

Depending on the tax regulations, there might be consequences for filing a belated return, such as penalties or interest charges. This example highlights how failing to meet the specified filing deadline results in Ram’s tax return being labeled as belated.

Filing Timeframe for Belated Income Tax Returns and Recent Changes

A belated return refers to a tax return that a taxpayer can submit for previous financial year, but within a specific timeframe after the regular due date has passed.

The timeframe for submitting a belated return is determined by two factors:

  • It extends up to 3 months prior to the end of the relevant assessment year. This means that you can submit a belated return within this 3-month window before the assessment year ends.
  • Alternatively, you can submit the belated return before the assessment process is finalized. This refers to the completion of the tax assessment procedure by the income tax department.

As a result of the above considerations, the final deadline for submitting a belated return is set as the 31st of December of the relevant Assessment Year. This means that regardless of the specific assessment year, the absolute cutoff date for filing a belated return is December 31st.

Earlier, the taxpayers were given the flexibility to file a belated return either before the relevant assessment year ended or before the assessment process was completed, depending on which of these events happened first.

Starting from the Assessment Year 2021-22, there has been a modification in the time limit for filing a belated return. The time limit has been reduced by 3 months, which implies that taxpayers now have a slightly shorter duration to submit belated returns compared to previous years.

Missed Deadline ITR – What to Do Now?

Revised Belated Income Tax Returns: Understanding the Latest Regulations

Can a belated income tax return be revised? Yes, it can! If a taxpayer discovers any errors or omissions in their belatedly filed income tax return, they have the option to submit a revised return to correct these discrepancies.

Previous Regulations: In the past, revising a belated income tax return was not allowed. Once a belated return was filed, any errors or omissions could not be rectified through a revision.

Recent Amendments: However, starting from the Assessment Year 2017-18, a significant change came into effect. Taxpayers are now permitted to revise a belated income tax return if they find inaccuracies or omissions that need to be corrected.

This regulatory change provides individuals with the opportunity to amend mistakes or update information even in returns filed after the original due date.

Impact of Submitting a Belated Return: Understanding the Consequences

When you don’t submit your tax return on time, you miss out on certain benefits that are available to those who file on schedule. Along with losing these advantages, you might have to pay extra fees and interest for filing your return late. It’s important to understand these outcomes so you can make informed choices about when to file your taxes.

Delayed Refund: Filing a late return can lead to a delay in receiving any income tax refunds owed to you by the government. This is another negative outcome of filing a belated return. To ensure a quicker refund, it’s advisable to file your income tax return on time.

No carry forward of losses: You are also not allowed to claim losses or carry them forward if you file your income tax return late. However, you can still claim losses from house property and carry them forward.

Late Fee: The late fee will be imposed on belated returns. In simpler terms, if you file your income tax return after the due date, you will be subject to the late fee as outlined below.

  1. Total Income: Up to Rs. 2,50,000
    • Date of Filing: After the due date
    • Fees: No Fee
  1. Total Income: Up to Rs. 5,00,000
    • Date of Filing: After the due date
    • Fees: Rs. 1,000
  2. Total Income: Above Rs. 5,00,000
    • Date of Filing: After the due date
    • Fees: Rs. 5,000

For total income up to Rs. 5,00,000, if you file after the due date, the fee is Rs. 1,000. For total income above Rs. 5,00,000, the late filing fee after the due date is Rs. 5,000.

How to File Belated Income Tax Return Online A.Y. 2023-24?

Interest on Tax Due: If an assessee fails to furnish Income-tax return on or before the due date, he shall be liable for payment of interest under Section 234A for delay in furnishing of such return.

Interest will also be levied on income tax dues under section 234A, calculated at a rate of 1% per month or part thereof. This interest will be charged until the actual tax payment is made. The interest calculation will start from the original due date, which is July 31, 2023, for the assessment year 2023-24, and will continue until the date of your actual payment.

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