Taxpayers use Income Tax Returns (ITR) to provide reports to the IRS about their earnings and tax payments.
It is essential for individuals, businesses, and even various different entities to file their Income Tax Returns within the stipulated timelines. Filing on time saves the unnecessary penalty that may incur on failure or delayed payment of taxes.
What is Income Tax Return (ITR)?
An Income Tax Return (ITR) is a form or document that individuals, businesses, and other entities use to report their annual income, deductions, exemptions, and tax liabilities to the tax authorities. It is a declaration of their taxable income and the taxes they owe or are eligible to receive as a refund. The Income Tax Return allows taxpayers to provide comprehensive information about their financial transactions, sources of income, and expenses to the tax authorities. It helps determine the taxpayer’s tax liability and enables the government to assess and collect taxes effectively.
Financial Year (FY) and Assessment Year (AY) for Filing ITR
- From an income tax perspective, the financial year (FY) is the year in which you earn your income. The assessment year (AY) is the year following the financial year when you evaluate the previous year’s income and pay taxes on it.
- For example, if your financial year is from April 1, 2023, to March 31, 2024, it is known as FY 2023-24. The assessment year for the income earned during this period would start after the financial year ends, from April 1, 2024, to March 31, 2025. Therefore, the assessment year would be AY 2024-25.
When is the Last Date to File ITR 2024?
Last Date to File Income Tax Return (ITR) for FY 2023-24 (AY 2024-25) Without Late Fees: 31st July 2024. If you miss the July 31st deadline, you can still file a belated return by December 31, 2024. However, late filing may result in penalties and interest charges.
Taxpayers are typically required to file their ITR annually, providing details of their income and relevant financial information for a specific period, such as a financial year (FY). ITR filing start date for AY 2024-25 is 1st April 2024, and last date is 31st July 2024.
Missing out on the Income Tax Return filing last date can lead to penalties and notices from the Income Tax Department. To avoid these notices, make sure you file your ITR accurately and within the specified deadlines.
Why You Must File Your ITR Before July 31
- Avoid Penalties and Interest Charges: To avoid any fines and penalties under different sections of the Income Tax Act. Late filing of ITR can attract penalties upto Rs.5000 on income above Rs.5 lakh and Rs.1,000 on income upto Rs.1,00,000.
- Accurate Tax Reporting: Early filing gives you ample time to gather all necessary documents and information. This helps ensure your tax return is accurate, reducing the likelihood of errors or omissions.
- Claiming Refunds: Timely filing is essential for claiming refunds. If you’ve paid more tax than you owe, filing early ensures you receive your refund promptly from the Income Tax Department.
- Loss Adjustment: Timely filing allows you to carry forward losses incurred during the year. These losses can be adjusted against future profits, reducing your tax liability in subsequent years.
- Verification within 30 Days: After filing, you must verify your ITR within 30 days under tax laws. Filing early provides sufficient time to verify your return and rectify any errors if needed.
- Maintaining a Good Credit Score: Banks and financial institutions often require ITR as proof of financial stability when you apply for loans or credit cards. Filing your ITR on time showcases financial discipline, potentially improving your chances of securing credit on favorable terms.
- Avoiding Last-Minute Rush: Filing early helps you avoid the rush closer to the deadline, reducing stress and minimizing the risk of making hasty errors.
- Effective Financial Planning: Early filing allows you to plan your finances more effectively for the upcoming year, based on your tax obligations and refunds.
Income Tax Filing Due Dates for FY 2023-24 (AY 2024-25)
Category of Taxpayer | Due Date for Tax Filing – FY 2023-24 |
Individual / HUF/ AOP/ BOI | 31st July 2024 |
Businesses (Requiring Audit) | 31st October 2024 |
Businesses requiring transfer pricing reports | 30th November 2024 |
Revised return | 31 December 2024 |
Belated/late return | 31 December 2024 |
Updated return | 31 March 2027 (2 years from the end of the relevant Assessment Year) |
Consequences of Missed Income Tax Return Due Date
- Up to Rs. 5,000: For incomes exceeding Rs. 5 lakh.
- Rs. 1,000: For incomes below Rs. 5 lakh.
- No penalty: No penalty if your income is below the taxable limit.
- Interest on Tax Owed: If you owe any tax, you’ll also have to pay interest on it from the due date until you pay it. This interest is calculated at one percent per month or part of a month on the unpaid tax amount from the due date until the date of filing.
- Delay in Refunds: If you’re due a refund, you won’t receive it until you file your return.
- Ineligibility to Carry Forward Losses: Missing the deadline results in the inability to carry forward losses under most heads of income, except for house property. This is particularly disadvantageous for businesses and investors, as it can lead to a significant financial setback.
- Reduced Time for Rectifications and Revisions: Late filing reduces the available time for correcting errors or revising the return. Typically, the deadline for revising an ITR is until the end of the assessment year. Filing late compresses this timeline, limiting the opportunity to rectify mistakes effectively.
- Prosecution: The income tax department can initiate prosecution proceedings against you. This could lead to imprisonment for up to seven years and a fine.
- Difficulty Processing Loans: Some banks and financial institutions may not process loan applications from people who haven’t filed their ITRs.
- Selection of Old Tax Regime: It is important to note that taxpayers must file their income tax returns by the due date, which is July 31st. If they fail to file by this deadline, they will not be able to choose the old regime, as the new regime will automatically become the default for late filings.
FAQs
What is the last date to file income tax return (ITR)?
For the Assessment Year (AY) 2024-25, the due date for filing Income Tax Returns (ITR) for companies requiring an audit is 31st October 2024. If the company is involved in international or specified domestic transactions requiring a transfer pricing report, the due date is 30th November 2024.
Can I file a Revised Income Tax Return?
Yes, the revision of the Income Tax Return till the last date is allowed. The last date to file a revised ITR is December 31 of the relevant assessment year. Thus, the last date to file a revised ITR for FY 2023-24 (AY 2024-25) is December 31, 2024.