By Gyanendra Kumar Keshri
New Delhi [India], July 29 (ANI): The due date for filing income tax returns (ITR) for the financial year 2021-22 or assessment year 2022-23 is July 31, 2022. If you have already filed your return or manage to do so before the deadline, then that’s great. However, if you miss the July 31 deadline, there will be repercussions.
You can still file your return by December 31, 2022, but you will have to pay a late fee. This will also have other financial implications.
Taxpayers with an annual income of up to Rs 5 lakh will have to pay a late fee of Rs 1,000, while those with an income of more than Rs 5 lakh will have to pay a late fee of Rs 5,000.
However, if your gross total income is below the basic exemption limit, you will not be charged a penalty for filing late.
The basic exemption limit varies depending on the income tax regime you choose. Under the old regime, taxpayers below the age of 60 have a basic exemption limit of Rs 2.5 lakh, while those between 60 and 80 years of age have a limit of Rs 3 lakh. For individuals above 80 years of age, the limit is Rs 5 lakh. Under the new concessional regime, the basic exemption limit is Rs 2.5 lakh for all taxpayers, regardless of age.
Gross total income refers to the total income before taking into account any deductions under sections 80C to 80U of the Income Tax Act.
Apart from the late fee, missing the deadline can also result in interest charges on late payment of taxes.
“There may be additional taxes to be paid when filing the ITR, such as interest and dividends. If TDS was deducted at 10%, but you fall in the 20% or 30% tax bracket, you will have to pay the difference in tax with interest at a rate of 1% per month, as per Section 234 A,” said Sudhir Kaushik, Co-Founder and CEO, TaxSpanner.
If you file your return before the deadline, you only have to pay the outstanding tax. However, if you miss the deadline, you will have to pay the outstanding tax along with interest, starting from July 31. If the dues are paid after the 5th of any month, the interest for the entire month will have to be paid at a rate of 1% per month.
Taxpayers can reduce their liability by offsetting business losses or losses from the sale of property against other income. However, these losses can only be carried forward if the ITR is filed before the deadline.
“Losses (other than from house property) cannot be carried forward if you miss the deadline. Losses from the sale of property/shares/capital assets that occurred during the pandemic should be declared and filed before the deadline,” said Sudhir Kaushik, Co-Founder and CEO, TaxSpanner.
As per the Income Tax law, business losses (excluding speculative business) can be set off against any income except salary income. Any unadjusted losses can be carried forward for eight financial years after the current financial year and set off against any business income, as prescribed. For instance, losses incurred in the financial year 2020-21 can be set off against business income in the financial year 2021-22 and subsequent years.
You may receive a notice from the Income Tax Department for not filing or for mismatches.
On the possibility of receiving a notice from the Income Tax Department, Kaushik said, “During the COVID pandemic, many individuals invested in equities, as we are seeing in the ITR and AIS (annual information statement). So, notices for mismatches in declared income/loss may also be expected.”
If you miss the July 31 deadline, the last date for filing a belated income tax return for the financial year 2021-22 is December 31, 2022.
If you miss the December 31 deadline as well, you will have to file an appeal for condonation with the commissioner of income tax of your ward for refunds and carried forward losses. “If the reason is genuine, you may be granted permission,” said Kaushik.
There is a significant penalty if you owe taxes. “If you discover additional income in AIS or other documents that were not declared in the original return or not filed at all, you will have to pay an additional tax of 50% of the outstanding tax amount if you file an updated return within a year, and 100% if you file after one year but before two years,” he said.
If you miss the December 31 deadline, you will have to use a new form, ITR U, for the updated return and provide reasons for updating your income. These reasons could include: not filing the return previously, incorrect reporting of income, choosing the wrong heads of income, reduction of carried forward losses, reduction of unabsorbed depreciation, reduction of tax credit under sections 115JB/115JC, incorrect tax rate, and others. (ANI)