Late fee for filing the income tax return is maximum Rs. 5000/- & NOT Rs. 10,000/-

King can do no wrong- Income Tax Returns date not extended.

Finally, the extended date of 31^st March 2021 for the FY 2020-21 is over. There was no extension of the due date. Government has taken a very conscious call of not extending the due date. There are lot of taxpayers who have not filed the income tax return on the presumption that the date will be extended. All need to understand that every Government is acting hard against the non compliance and there is no excuse for non compliance. No matter, there were numerous faults/errors/nuisances at the end of the Government but the fact remains, King can do no wrong. Earlier, the due date for filing income tax returns for AY 2021-22 was already extended by five months to December 31^st, 2021.

From the FY 2021-22 onwards, even the revised returns are not allowed to be filed till 31^st March. From FY 2021-22, the last date to revise the return or file belated return would be 31^st December only. It means that the taxpayers would be required to act fast as far as return filing of subsequent year is concerned. The non extension of the date in the current year by the Government is like asking the taxpayers to be prepared for the next year compliance till December. All the taxpayers who failed to file the return this year within due date would certainly ensure the filing well in advance for the next year.

Consequences if the return for the FY 2020-21 couldn’t be filed till 31.12.2021:
If taxpayers whose extended due date was 31^st December 2021 have not filed the return then there is no need to worry as such. Still the taxpayers can file it till 31.03.2022, of-course with some monetary loss.

The process of filing a belated return is the same as that of original return within due date. If a belated return is filed after the due date, the taxpayer would be liable to pay the tax along with interest @ 1% per month (simple interest) under Section 234A. Further, this filing will attract the late fee.

Amount of Late Fee:
If the total income does not exceed Rs 5 lakh, the maximum late fee for delay is mere Rs 1000. However, if the return is filed after the due date or extended due date, then the late fee would be Rs. 5000/-. [Till last year, there were two slabs of penalty for taxpayers with income exceeding Rs. 5 Lakh. If the return is filed after the due date but on or before 31^st December then the late fee was Rs. 5,000/- It was Rs. 10,000/- if the return is filed after 31^st December. These two slabs has been done away with by the Finance Act-2021 as it has reduced the period of filing belated return form 31^st March to 31^st December].

It may be noted that late fee is attracted under section 234F which reads as under:

Fee for default in furnishing return of income.

234F. [(1) Without prejudice to the provisions of this Act, where a person required to furnish a return of income under section 139, fails to do so within the time prescribed in sub-section (1) of the said section, he shall pay, by way of a fee, a sum of five thousand rupees :
Provided that if the total income of the person does not exceed five lakh rupees, the fee payable under this section shall not exceed one thousand rupees.]
(2) The provisions of this section shall apply in respect of return of income required to be furnished for the assessment year commencing on or after the 1st day of April, 2018

[It may be noted that the highest late fee was reduced from Rs. 10,000/- to Rs. 5000/- by the Finance Act-2021 w.e.f. 01.04.2021.

Earlier, Section 234F used to read as under:

“(1) Without prejudice to the provisions of this Act, where a person required to furnish a return of income under section 139, fails to do so within the time prescribed in sub-section (1) of the said section, he shall pay, by way of fee, a sum of,—
 (a) five thousand rupees, if the return is furnished on or before the 31st day of December of the assessment year;
 (b) ten thousand rupees in any other case:
Provided that if the total income of the person does not exceed five lakh rupees, the fee payable under this section shall not exceed one thousand rupees.”]

What if the return is filed in a hurry and it is erroneous?
The question arises as to whether the return filed can be revised? It may be noted that if after filing your tax return, taxpayers realizes that there is some error in reporting the incomes or some deductions/claims were not availed of in the return computation then it is possible to file a revised return. The last date of filing revised return for FY 2020-21 has been extended to March 31, 2022.

Other Consequences of belated filing:
In addition to interest and late fees, there are other consequences of not filing the income tax return within due date. Under the Indian income tax Act, losses under any head of income (other than income from house property), can be carried forward only if the tax return is filed within the due date. However, taxpayers can carry forward the loss under the head income from house property, even if the tax return is filed after the due date. In short, to avail the benefit of carry forward of the loss, the filing of the return within due date is mandatory.