Up to Assessment Year 2017-18, assessee could file his tax return without any penalty before the end of the assessment year and if assessee failed to file the return of income before the end of the assessment year, penalty under Section 271F could be imposed by the Assessing Officer provided there was no reasonable cause for such delay. This penalty was discretionary in nature and levied rarely. This penalty provision was omitted by the Finance Act, 2017.

In lieu of such penalty, the Finance Act, 2017 vide section 234F levied fees of Rs.5,000 in case where return is furnished after the due dates prescribed under Section 139(1), but on or before 31st December of the relevant assessment year and Rs. 10,000, in other cases. However, it is also provided to restrict the fees to Rs. 1,000, where the total income does not exceed five lakh rupees. Here it should be noted that no return can be filed after the end of the assessment year.

After introduction of this new provision, the assesses who miss the due date shall now be mandatory required to pay the late filing fees under section 234F along with interest under section 234A, 234B and 234C before filing of return of income. The Income-tax Dept. shall not be required to initiate the penalty proceedings separately to levy such fees on late filers.

Relevant changes have been incorporated in the new ITR forms wherein a new row is added to enable the assessee to fill the details of late filing fees.

The provision of section 234F is made with a view to ensure that returns are filed within the due dates specified in section 139(1). However, fees levied under section 234F will be leviable on all assessees who have furnished return beyond the due date specified under section 139(1) irrespective of the reason for such delay and whether all the taxes have been paid through TDS or Advance Tax.”

Therefore, to avoid end moment rush and various server and technical issues of Income-tax department, it is advisable that the return of income is filed keeping a target as 30 June 2018.

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May 2021