If you have yet to submit your income tax return for the Assessment Year 2024-25 (covering Fiscal Year 2023-24), the deadline for filing is December 31. Failing to file can lead to severe repercussions for eligible Income Tax Assessees, which may include imprisonment.
Eligible assessees have at least two ways to submit their income tax returns: on or before the due date, and afterward, but no later than December 31, with a penalty for late filing. If an assessee accidentally omits any income on their submitted return, they have the opportunity to file an updated return within two years following the conclusion of the relevant Assessment Year, albeit with an additional payment.
For instance, the deadline for filing the Income Tax Return (ITR) for Assessment Year 2024-25 for an individual whose accounts do not need to be audited was July 31, 2024. They can still file a belated ITR, incurring a penalty ranging from ₹1,000 to ₹5,000 until December 31. However, individuals with a gross income below the basic exemption threshold will not incur any fines. Additionally, an updated return can be submitted until March 31, 2027. Anyone earning above ₹2.5 lakh (under the old tax scheme) or ₹3 lakh (under the new tax scheme) is mandated to file an ITR.
If someone files a belated return (after the due date but by December 31), they will forfeit the ability to carry forward and offset any losses against future earnings, except for losses related to house property. If any taxes are owed on April 1, an interest charge of 1% per month on the outstanding tax will be applied, calculated from the date of the relevant financial year’s return filing until the due date.
TDS Rates for Non-Filers
Non-filers will be subject to a higher rate of TDS (Tax Deducted at Source) and TCS (Tax Collected at Source). In these cases, the applicable rate would be double the rate specified in the Income Tax Act or Finance Act, or a flat 5%, contingent upon the recipient being a non-filer with a PAN. Should the recipient lack a PAN, the TDS rate will increase to 20% or potentially higher.
According to section 276 CCC of the Income Tax Act, legal action may be initiated for failure to file an ITR. An eligible assessee who neglects to submit their ITR and has a tax liability exceeding ₹25,000 may face rigorous imprisonment ranging from a minimum of 6 months to 7 years, along with a monetary fine. For cases where the tax liability is under ₹25,000, the punishment may include rigorous imprisonment of at least 3 months but not exceeding 2 years, accompanied by a fine.
The Income Tax Department has set a goal of increasing the number of new filers by 10% for the ongoing fiscal year compared to the total number of filers by the end of the fiscal year 2023-24. It is noteworthy that more than 10% of new filers were registered in FY 2020-21, with achievements of 8% in FY 2021-22, 9.3% in FY 2022-23, and 11.9% in FY 2023-24.