To file an Income Tax Return (ITR) is necessary because it reflects the taxpayer's income for the relevant financial year. It is essential to submit it by the deadline to avoid penalties.
For the financial year 2023-24 (assessment year 2024-25), the deadline to file ITR is 31st July 2024. You have the option to file a belated return by 31st December 2024, but this incurs penalties.
In India, the penalty for late filing of ITR varies based on the taxpayer's income level. Let's understand more about it.
1. For individuals with a net taxable income exceeding ₹5 lakh for the financial year 2023-24 (assessment year 2024-25), there could be a penalty of up to ₹5,000 for filing a belated return.
2. For individuals with a net taxable income of ₹5 lakh or less, the maximum penalty for filing a belated ITR is capped at ₹1,000.
3. Taxpayers whose taxable income is below the basic exemption limit and who file ITR only to claim a refund are exempted from penalties for belated filing. The determination of the taxable income threshold applies before applying any deductions.
Legal Requirement: Filing your income tax return is mandatory by law. Non-compliance may lead to penalties and potential legal consequences.
Ensuring Accuracy: Ensuring that your taxes are filed correctly can provide you assurance and prevent future complications.
Tax Benefits or Refunds: Timely filing of your return may qualify you for specific tax benefits or refunds.
Avoiding Interest: Apart from penalties, late payment of any outstanding taxes beyond the initial due date may attract interest charges.
Opportunity Costs: In some cases, delayed filing may result in missed opportunities to claim specific deductions or exemptions.
