The annual tax season is drawing to an end; the last date to file one’s individual income tax returns is July 31 — Wednesday.

While there is speculation that the deadline would be extended, officials have given no indication that it would happen. Last year, too, a large number of taxpayers were caught off guard when the deadline was not extended.

But have you wondered what happens if you miss the deadline? Here’s what we found out.

How many have filed their taxes until now?

The last day to file one’s Income Tax returns (ITR) for FY 2023-24 is July 31. According to officials, as of July 26, a whopping five crore people have filed their returns. This is an eight per cent rise from the number of ITRs filed in the previous year. Moreover, 28 lakh ITRs were received on July 26 itself.

Over the past few years, the number of taxpayers has increased in the country. Official data shows that 7.4 crore individuals filed tax returns in FY2022-23 and 6.75 crore in FY2020-21.

What happens if you miss the July 31 deadline?

Individuals who miss the July 31 deadline can still file their returns but will have to incur a late fee penalty. This is called filing a belated return. The last date to file a belated return for the financial year 2023-2024 is December 31, 2024.

As per Section 234F of the Income Tax Act, 1961, one will incur a penalty of up to Rs 5,000. For small taxpayers — whose income doesn’t exceed Rs 5 lakh — the penalty is restricted to Rs 1,000. An individual is required to pay this penalty even if no tax payment is required.

In addition to late fees, one will also owe interest on any unpaid taxes. This interest accrues from the original due date until the full amount is settled.

There are also other drawbacks to filing a belated ITR. Individuals can’t carry forward their losses from capital gains, business income and other sources. The only exception to this rule is that losses from house property can be carried forward.

If one files their taxes late, they also lose the option of choosing between the
new tax and the old tax regime. This could be a problem for those who have
higher income and higher deductions and would actually benefit from the old tax regime. For such people, switching to the new regime, might increase their tax liability and one may also have to pay interest on the outstanding tax amount.

How do you file a late ITR?

If you are unable to file your returns before the last date, the process to file them after the deadline is the same. However, when filling up the belated ITR form, one needs to select section 139(4) instead of 139(1). Section 139(1) is to be selected if you file your ITR on or before the expiry of the due date, which is July 31, 2024.

Will there be an extension to the deadline?

Amid the rush to file Income Tax Returns, some have raised complaints of technical glitches on the income tax website, owing to which the All Gujarat Federation of Tax Consultants (AGFTC) and the Income Tax Bar Association, Ahmedabad (ITBA) wrote a letter to Finance Minister Nirmala Sitharaman, asking for a 30-day extension.

The letter stated that although the Central Processing Centre (CPC) of the I-T Department is processing ITRs promptly, the discrepancies in reporting between AIS/TIS and 26AS are being communicated as errors or are subject to notices for rectification. It was mentioned that filing returns and preparing them takes time in this context, reported Free Press Journal.

This has led to speculation and rumours that the Income Tax Department may extend the deadline beyond July 31.

However, officials have stated that there are no plans to extend the deadline and reports talking of an extension were just rumours. The Income Tax officials also said that they were working to sort out the issues on the e-filing portal.

The CBDT chairman, according to a PTI news report said, “We are engaging closely with our service providers Infosys, IBM and Hitachi who are on the job. The volumes are high and the compliance is also good… I have been assured that the website will function properly.”

If this article has served as a wakeup call, head to https://incometaxindiaefiling.gov.in/ and be a responsible taxpayer.

With inputs from agencies

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Tomorrow’s the last day to file your taxes. Here’s what happens if you don’t