You can file your belated IT Returns anytime on or before 1 year from the end of the relevant Assessment Year (AY). However, if you file your ITR after the deadline, you have to pay a late filing fee of up to Rs.5000. There is a relief given to small taxpayers — the IT department has stated that with effect from FY 2020-21, if the total income does not exceed Rs 5 lakh, the maximum penalty levied for delay will be Rs 1000. There are also other consequences and inconveniences attached to the delay. In case you do not file IT returns within the due date (for the FY 2020-21, the last date is 31.12.2021), you are not entitled to claim loss under the head capital gains or any loss in your business. Further, you cannot carry forward these losses to the next years for set off against income in future years. Above all, in case you’re entitled to receiving a refund from the government for excess taxes you have paid, you must file your return before the due date to receive the refund at the earliest.
However, there are certain individuals who can file their ITR without paying a penalty even after the expiry of the deadline.
As per section 234F, there will be no late filing fees to be levied on the ITR filed after the deadline if the gross total income does not exceed the basic exemption limit of Rs.2.50 lakhs at present under the old and new tax regime (Basic exemption limit is Rs.3 lakh for Senior Citizens of above 60 years and Rs.5 lakh for Super Senior Citizen of above 80 years under old tax regime). Under section 139(1) the gross total income refers to the total income before taking into account the deductions under sections 80C to 80U under the Act.
Nevertheless, the above rule has the following two exceptions where you will have to pay the penalty if you don’t file ITR before the deadline.
First Exemption: It is mandatory to file ITR before the due date for certain sections of individuals even if their gross total income does not exceed the basic exemption limit as per the seventh proviso of Section 139(1).
Section 139(1) seventh provision mandate compulsory filing of income even though the income is below the exemption limit for such taxpayer
1. Total deposit in the current account in the bank/s is Rs.1 crore or more.
2. Foreign travel expenditure of Rs.2 lakh or more for himself or any other person for travel to a foreign country;
3. Amount spent for more than Rs 1 lakh on the consumption of electricity (whether the consumption expenditure for domestic or commercial usage or
4. Who full-fill such other conditions as may be prescribed.
Second exception: If you hold foreign assets such as stocks of a foreign company. If you are an ordinarily resident individual with income from foreign assets and your taxable income is below the threshold limit, then you will have to pay the penalty if you don’t file ITR before the deadline.
