What is the penalty for belated ITR filing?
Under Section 234F of the Income Tax Act, 1961, filing a belated ITR incurs a penalty of up to Rs 5,000.For small taxpayers with a taxable income not exceeding Rs 5 lakh, the penalty is restricted to Rs 1,000, according to an ET report. The important thing to note is that this penalty applies even if the belated ITR shows zero tax payable. Additionally, penal interest on the pending tax payable must be paid when filing a belated ITR.
Who is required to pay the penalty?
Certain taxpayers are required to pay penalties if they miss the ITR filing deadline and they fulfil the following conditions:
- Income Exceeds Basic Exemption Limit: Taxpayers whose income exceeds the
basic exemption limit will be penalised for late filing. The limit varies by tax regime: Rs 3 lakh under the new tax regime, irrespective of age, and different limits under the old tax regime based on age.
- Section 139(1) Conditions: Even if income is below the exemption limit, taxpayers must file an ITR if they meet specific conditions in Section 139(1). These include:
- Spending Rs 2 lakh or more on foreign travel.
- Paying Rs 1 lakh or more in electricity bills.
- Depositing Rs 1 crore or more in current accounts.
- Holding Foreign Assets: Residents with foreign assets or income must file an ITR, even if their income is below the exemption limit. Late filing fees apply in these cases.
Also Read | ITR refund status for FY 2023-24: How to check income tax refund status online – here’s a step-by-step guide for incometax.gov.in & NSDL websites
Exceptions to Penalties
Individuals might need to submit an income tax return to receive a refund. However, if their taxable income is below the basic exemption limit, they will not face penalties for filing after the due date, according to income tax laws. This means the gross taxable income is considered before any eligible deductions are accounted for.
How is a belated ITR filed?
The process for filing a belated ITR is the same as filing on time, with the key difference being the selection of Section 139(4) instead of 139(1) on the ITR form.