Understanding the Importance of ITR Filing Deadlines

As the financial year draws to a close, taxpayers in India must prepare for the impending deadline for filing their Income Tax Returns (ITR). December 31, 2024, marks the final date for submitting belated and revised returns for the financial year 2023-24 (Assessment Year 2024-25). Many taxpayers are unaware of the consequences of missing this deadline. Understanding the implications can help individuals avoid unnecessary penalties and complications.

Consequences of Missing the Belated Return Deadline

Failing to submit a belated return by December 31, 2024, can lead to significant penalties. According to Section 139(4) of the Income Tax Act, a penalty of ₹5,000 applies to those who miss this deadline, irrespective of any outstanding tax amounts. For individuals with lower taxable incomes, the penalty is reduced to ₹1,000. However, those with income below the ₹3 lakh basic exemption limit will not face any penalties.

Kinjal Bhuta, Secretary of the Bombay Chartered Accountants’ Society, emphasizes the importance of filing a belated return. She states, “A belated return is the last chance for the taxpayer to file the ITR and claim refunds and certain losses.” If a taxpayer fails to file a belated return, they forfeit the opportunity to claim these credits for that assessment year. After the deadline, the only option left is to file an updated return, which is subject to certain conditions, including having a tax liability.

Another critical aspect to consider is the change in tax regimes. The old tax regime, which offered various deductions and exemptions, is no longer available for belated returns. The new tax regime, effective from April 1, 2023, allows only limited deductions, such as a standard deduction of ₹50,000 and employer NPS contributions. This change can significantly impact the tax liability of individuals who miss the deadline.

Implications of Missing the Revised Return Deadline

Taxpayers may need to file a revised return to correct errors in their original or belated returns. This process allows individuals to rectify mistakes such as unreported income or unclaimed deductions. However, if a taxpayer misses the deadline for filing a revised return, they lose the opportunity to make these corrections.

Bhuta explains, “If the taxpayer misses the deadline to file a revised return, there is no other mechanism to file a revised return again for that assessment year.” The income tax laws do permit the filing of an updated return, but this option is limited. Taxpayers cannot file an updated return if they have losses, expect an increased refund, or if the updated return reduces the total tax liability from the original or belated return.

Taxpayers can submit multiple revised returns, but experts advise caution. Frequent revisions may attract scrutiny from the Income Tax Department. According to Section 139(5) of the Income Tax Act, a return can only be revised within three months before the end of the relevant assessment year or before the completion of the assessment, whichever comes first. Once the ITR is processed under a regular scrutiny assessment, it cannot be revised.

Importance of Timely Filing for Taxpayers

Timely filing of ITR is crucial for taxpayers to avoid penalties and ensure compliance with tax regulations. The deadline of December 31, 2024, for belated and revised returns serves as a reminder for individuals to review their financial records and ensure all necessary documents are in order. Missing this deadline can lead to financial losses and complications in tax matters.

Taxpayers should be proactive in understanding their obligations and the implications of their actions. By filing on time, individuals can claim refunds, carry forward losses, and avoid unnecessary penalties. It is essential to stay informed about the tax laws and any changes that may affect their filing status.

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