TAX CONNECT IN MONEYCONTROL & NEWS18 : EXPLAINED ALL ABOUT BELATED IT RETURNS

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It was anticipated that the ITR deadline would again be extended but it was not to be, as the MoF considered otherwise,” says Vivek Jalan of Tax Connect Advisory Services LLP, a consulting firm. So now, the last date for ITR filing for FY 2020-21 is 31st March 2022, by way of a belated return under the provisions of Section 139(4) of the Income Tax Act, adds Jalan.

So, make sure you file a return before 31 March and do not miss this deadline. Because, “if the March deadline is missed, then the taxpayer will not be able to voluntarily file the ITR. In such a case, the ITR can only be filed in response to a notice from the Tax department,” says Jalan.

Penalty and interest

If you missed the extended due date to file the ITR, you may have to pay a penalty to file a belated return.

“A belated income tax return attracts a late filing fee under Section 234F of the Income Tax (I-T) Act of Rs 1,000 incase the Gross Total taxable income during the financial year does not exceed Rs 5 lakh; or Rs 5,000 otherwise,” says Jalan.

However, “In case the Gross Total Income is below the basic tax exemption limit then no late fees need to be paid for a belated return too, subject to certain exceptions,” mentioned Jalan. The basic exemption limit is Rs 2.5 lakh for individuals up to an age of 60 years, Rs 3 lakh for individuals between the age of 60 years and 80 years, and Rs 5 lakh for those above the age of 80 years.

Besides that, if there are tax dues to be paid, they attract penal interest. “Interest under section 234A at 1 per cent per month or part thereof will be charged on the unpaid tax amount. The calculation of interest will start from the date falling immediately after the due date, i.e., December 31, 2021, for AY 2021-22. If the outstanding tax liability is Rs 1 lakh or more, the interest will be levied from the original due date till the date of filing ITR. The original due date for AY 2021-22 was 31st July 2021,” says Jalan. So, the longer you wait to file the ITR the more you pay.

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After the tough stance taken by the ministry of finance in not further extending the ITR due dates for individuals from December 31 2021, the ministry has somewhat tried to move a step this time by extending the time limit for Income Tax audit and transfer Pricing Audit by 15-30 days to February 15 2022 and the corresponding ITR Dates of such assesses by 15-30 Days to 15th March 2022. Such extension would benefit primarily the corporate and larger assesses. However, still the demand for waiving off at least the penalties for the late filing of individual returns have not been accepted by the finance ministry. Vivek Jalan, Partner of Tax Connect Advisory Services

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