Summary
While the benefits of filing a tax return on time are well known, many people tend to miss the deadlines for this important exercise. Although the late filing of IT return is allowed, but it should be avoided as late filing of tax returns may attract penalties.
The process of filing IT returns has been simplified greatly since the introduction of e-filing and the recent launch of the new income tax portal. However, despite such applaudable measures from the government, many people still get late in filing their returns.
People should be aware that filing IT returns on time is as important as paying the taxes failing which there can be consequences in the form of penalty for late filing of IT returns.
Due Date for Filing ITR for the Financial Year 2020-21 (The Assessment Year 2021-22)
While the original due date for filing ITR was 31st July 2021, the income tax department extended the dates of all categories of taxpayers. The revised due dates are listed in the table below.
| Sr. No. | Particulars | Due Date |
| 1 | People or firms that are not liable for tax audit | 31 December 2021 |
| 2 | People or firms that are covered under the tax audit | 15 February 2021 |
| 3 | Taxpayers covered under transfer pricing | 28 February 2021 |
| 4 | Revised or belated return of earnings for FY 2020-21 | 31 March 2022 |
Penalty on Late Filing Under Section 234F
If you come under the category of taxpayers who need to mandatorily file an IT return, you may be charged a penalty in the form of a late filing fee for filing your returns after the due date.
Since its implementation from FY 2017-18, the maximum penalty has been Rs 10,000. However, in Budget 2021, the maximum penalty for filing belated ITR for FY 2020-21 is reduced to Rs 5000.
Individuals with income below the taxable limit will not be levied penalty even on belated tax returns.
Benefits of Filing IT Returns on Time
Apart from attracting penalties on late filing of IT returns, you can lose on some great benefits that come with filing your income tax returns on time.
- Possibility of Quick Disbursement of Loan
Many lenders ask for ITRs as income proof. Therefore, your chances of getting a loan increase if you provide your ITR details.
- Tax Refunds
Filing IT returns on time can ensure faster processing of tax refunds, if any.
- Carry Forwarding the Losses
You will not be able to carry forward the losses from the previous year if you file belated tax returns. Therefore, you should file your returns on time to avail of this benefit.
The benefits of filing your returns on time far outweigh the consequences and hassles of late filing of tax returns. Now that you are aware of inconveniences you may get subjected to while filing late returns, it would be wise to file them now without waiting for the eleventh hour.
