The last date for filing an income tax return (ITR) for the assessment year 2019-20 is August 31 or Saturday. You will have to pay a penalty and face certain restrictions when you file a belated return, if you fail to file your ITR by the due date.
You can still file your ITR any time during the current assessment year 2019-20. So if you fail to file returns for the current AY 2019-20 in time, you can file a belated return till March 31 or before the completion of assessment by the income tax department, whichever is earlier.
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 a penalty of Rs 5,000. If you file it between January 1 and March 31 of the assessment year, the penalty goes up to Rs 10,000.
However, the penalty is limited to Rs 1,000 for those who have an income below Rs 5 lakh.
The penalty along with the due tax needs to be paid before you submit your belated ITR.
Under section 234A of the Income Tax Act, you are liable to pay simple interest at 1% per month or part of a month for delay in filing the return of income. You will have to pay the penalty on the belated return, irrespective of whether any tax is due or not.
You will also not be allowed to carry forward certain losses to subsequent years for set-off. For instance, capital loss and loss under income head house property can be carried forward for the next eight AYs and can be adjusted against gains during these years, but only if the return is filed by the due date.
If any tax refund is due to you and you file the ITR within the stipulated time, you can earn interest on the refund claim. A refund is claimed when excess tax paid on your income during the year as per Section 244A of the Income-tax Act, 1961. However, in the case of belated returns, you may lose this interest.
If you don’t file the ITR at all, the tax department can send you a notice which can even lead to prosecution. There are provisions of jail term from three months to two years if you don’t file your ITR. And, if the due tax is more than Rs 25 lakh, the jail term can last up to seven years. But, if you manage to file your ITR before the end of the assessment year, the prosecution is not initiated.