As the calendar inches closer to the year-end, taxpayers who have not yet filed their Income Tax Returns (ITRs) for the financial year 2022-2023 should take immediate action. The deadline of December 31, 2023, serves as the final opportunity for individuals to fulfill this obligation, yet it comes with penalties and interest for late filing.
Beyond meeting this obligation, taxpayers can use the process to claim refunds for excess taxes paid or deducted during the fiscal year.
Additionally, interest is levied on belated filings. In case of late filing of return, taxpayers are liable to pay interest under section 234A at the rate of 1% for every month, or part of a month, on the amount of unpaid tax.
Beyond the December 31 cutoff, severe financial implications unfold. Delinquent taxpayers may face penalties and interest charges. However, another hope remains for those who miss the deadline, as an updated return can still be filed within 24 months of the end of the relevant assessment year, albeit with additional income tax.
A penalty or fee is not levied upon a person who wishes to furnish an updated return. However, they will be required to pay an additional tax in accordance with Section 140B of the Income Tax Act.
A taxpayer is required to furnish an updated return in those ITR forms which were notified for the respective assessment year for which an updated return is to be furnished. Such an ITR form is to be filed along with form ITR-U.
Nevertheless, an updated return cannot be submitted for claiming a tax refund.
In case taxpayers do not file ITR at all, they will not be able to carry forward the losses of the current assessment year. Moreover, penalties, ranging from a minimum of 50% to a maximum of 200% of the assessed tax, may be imposed for non-compliance.
In extreme cases involving high-value discrepancies, prosecution becomes a possibility.
First Published: Dec 11, 2023 11:31 AM IST