Haven’t Filed ITR Yet? Here’s What Happens if You Miss August 31 Deadline

The last date for filing income-tax returns for assessment year (AY) 2019-20 is near –August 31, 2019. Last month, the deadline was extended from July 31 to August 31 to give more time to taxpayers to file returns. But what happens if you miss the extended deadline, too?

Taxpayers can actually file ITRs for AY 2019-20 till March 31, 2019. However, it doesn’t come without a cost. According to income-tax rules, if you file your return after the due date but before December 31 of the assessment year, you will have to pay Rs 5,000 as penalty. If you file it between 1 January and March 31 of the assessment year, the penalty goes up to Rs 10,000.

However, this penalty is applicable for individuals who have an income above Rs 5 lakh per annum. In case your income is less than Rs 5 lakh, your penalty amount can’t exceed Rs 1,000.

Besides paying penalty, taxpayers also need to pay interest on due taxes each month until they file their ITR. Under section 234A of the Income Tax Act, the taxpayer is liable to pay simple interest at 1% per month or part of a month for delay in filing the return of income. Remember, the penalty along with the due tax needs to be paid before you submit your belated ITR.

However, if taxpayers fail to file their ITR altogether, the tax department can send them a notice which can even lead to prosecution. There are provisions of jail term from three months to two years on non-filing of ITRs. Also, the jail term can last up to seven years if the due tax is more than Rs 25 lakh. But, if the taxpayer manages to file return before the end of the assessment year, the prosecution is not initiated.

Filing belated returns has some more disadvantages. Taxpayers are not allowed to carry forward certain losses to subsequent years in case they miss the ITR deadline. Additionally, they may also lose the interest on the tax refund amount, if any, that they would have got if they would have filed their returns within the deadline. Hence, it is advisable to file your return well in advance and save some money.