As per Explanation 2 to Section 139(1) of Income Tax Act, 1961, below classes of taxpayers must file their return on or before 31 October,2024:

(a) Corporate-assessee; or

(b) Non-corporate assessee whose books of account are required to be audited under Income Tax Act or any other law for the time being in force; or                                         

(c)Partner of a firm whose accounts are required to be audited under Income Tax Act or any other law for the time being in force or the spouse of such partner if the provisions of section 5A (Apportionment of Income between spouses governed by the Portuguese Civil Code) applies to such spouse.

Benefits of Filing ITR on Time

Filing your ITR on time does make you feel responsible and good about yourself, but the benefits don’t end there. Filing your ITR on time can benefit you in more ways:

Easy Loan Approval

Filing the ITR will help individuals when they have to apply for a vehicle loan (2-wheeler or 4-wheeler), house loan, personal loan, etc.

Claim Tax Refund

If you have paid excess tax to the income tax department, you should file your income tax return as early as possible to process the return and receive a tax refund.

Income & Address Proof

You can use the income tax return as proof of your income and address, which is mandatory when applying for a loan or visa.

Quick Visa Processing

Most embassies & consulates require you to furnish copies of your tax returns for the past couple of years at the visa application.

Carry Forward Your Losses

If you file the income tax return within the due date, you will be able to carry forward losses to subsequent years. You can use such losses to set off against your future income.

Avoid Penalty and Prosecution

You can avoid the income tax department initiating prosecution proceedings as discussed in the below section.

ITR Not Filed for the Previous Financial Years

If you missed filing ITR for previous years. Then you have two options

  1. Make an application u/s 119(2)(b) for Condonation 
  2. File Updated return u/s 139(8A)

Consequences of Not Filing by the Due Date

Prosecution

The income tax officer can initiate proceedings for prosecution if the person willfully fails to file a return even after issuing notices. The imprisonment can be for a term of three months to two years with a fine.

If the tax you owe to the income tax department is higher, the prosecution period may extend to seven years.

Penalty

Further, the income tax officer may impose a penalty of up to 50% of the tax due in case of underreporting income.

Apart from the penalty levied by the IT department, there are other consequences that a taxpayer may face for late filing of returns:

Unable to set off losses

Losses incurred (other than house property loss) are not allowed to be carried forward to subsequent years. You cannot set off these losses against future gains if the return has not been filed within the due date. However, if there are losses under house property, carrying forward losses is permitted.

Interest in the delay of filing the return

Apart from the penalty for late filing, interest will be charged under Section 234A at 1% per month or part thereof on tax due until the payment of taxes.

Delayed refunds

In case you’re entitled to receive a refund from the government for excess taxes paid, you must file the returns before the due date to receive your refund at the earliest.