1. Income Tax Return (ITR) filing is not just about ticking a compliance box, it is an opportunity to stay right side of the law, claim eligible refunds and avoid last minute stress. ITR filing due date for taxpayers not requiring audit, such as individuals and HUFs, has been extended to 15th September 2025 from 31st July 2025 ( for FY 2024-25). The clock is ticking – 15th September is around the corner. Procrastination may cost taxpayers penalties interest or even loss of certain benefits. Here’s a quick look at the consequences of missing the due date:
2. Late Filing Penalties: If the ITR is not filed within the prescribed due date, a late fee of up to Rs. 5,000 may be levied under section 234 of Income Tax Act. For taxpayers with taxable income below Rs 5 lakh, the maximum fee is Rs 1,000.
3. Interest Liability under Section 234A: Taxpayers will be liable to pay simple interest @ 1% per month, or part thereof, starting from the day immediately following the due date. Even if the tax has already been paid, interest is still applicable on the tax liability for delayed filing of ITR. It is important to note that ITR cannot be filed without payment of due taxes and interest.
Let us understand this with an example. Mr. Anupam had a tax liability of Rs. 1,00,000, which was paid on time. However, if he files ITR on 15th December, interest at 1% per month will be applicable for 3 months. This works out to Rs. 3,000, and unless he pays this amount, his ITR filing cannot be completed.
4. Restriction on Carry Forward of Losses: It is quite common these days for individuals engaged in F&O or Share trading activities, to incur losses. For such taxpayers, filing the return within the due date is crucial. If the return is not filed on time, these losses cannot be carried forward. As a result , they lose the opportunity to set off losses against future income, leading to higher tax burden in subsequent years. If the return is filed after the due date , no losses can be carried forward except losses under the head ‘Income from House Property’ & Unabsorbed depreciation.
5. Restriction on Switching Tax Regime: The regime option to be selected before the ITR due date i.e. 15th September 2025. Since the new regime is the default regime, taxpayers with significant deductions or exemptions will not be able to switch to the old regime after 15 September 2025 . This would mean losing those benefits and facing a higher tax liability under the default regime.
6. Delay in Refund: Another consequence of delayed ITR filing is that it can significantly delay the processing of refund.
7. Other Consequences: A delayed ITR filing can result in other adverse consequences and add to taxpayer’s stress. It may also effect financial credibility , as timely ITR are often required for visa applications, loans or credit approvals.
8. Taxpayers are advised not to wait until the last moment. File the return on time and secure both peace of mind and financial advantage . For return filing related any issue such as validation error etc, the author may be approached at caanitabhadra@gmail.com.
Disclaimer: The article is for educational purposes only.
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