Section 234F of the Income Tax Act - What is Penalty for Late Filing

• Web Online CA 383

Applicability: This section applies to individuals and Hindu Undivided Families (HUFs) who are required to file their income tax returns under Section 139(1) of the Income Tax Act. This includes most taxpayers, except those who are exempt from filing ITRs under specific criteria.

Penalty Amount: The penalty amount under Section 234F varies based on the timing of filing the return. As of my last update, the penalties were as follows:

- If the return is filed after the due date but on or before December 31 of the assessment year: Rs. 5,000.

- If the return is filed after December 31 of the assessment year: Rs. 10,000.

- However, for individuals whose total income does not exceed Rs. 5,00,000, the maximum penalty is limited to Rs. 1,000.

Exceptions: Certain individuals, such as senior citizens (aged 60 years or above) and super senior citizens (aged 80 years or above), who are not engaged in business or profession, are exempt from the penalty for late filing of ITR if the tax payable is nil.

Mode of Payment: The penalty is payable along with the tax payable at the time of filing the belated return.

Non-applicability: The penalty under Section 234F is not applicable in cases where the return is filed after the due date but before the end of the assessment year and there is no tax payable.

Consequences of Non-compliance: Failure to pay the penalty within the stipulated time may result in further consequences, such as interest on the outstanding penalty amount.

Who is required to file an Income Tax Return?
In India, individuals and entities meeting specific criteria are required to file income tax returns (ITR) with the Income Tax Department. Here's a breakdown of who is typically required to file an income tax return:

Individuals: Individuals whose total income before deductions exceeds the basic exemption limit during the financial year are required to file income tax returns. The basic exemption (liability) limit based on the age and residential status of the individual income tax return.

Hindu Undivided Families (HUFs): HUFs that have income exceeding the basic exemption limit before deductions are required to file income tax returns.

Companies: All registered companies, whether public or private, are mandated to file income tax returns regardless of whether they have incurred profits or losses during the financial year.

Partnership Firms: Partnership firms, including Limited Liability Partnerships (LLPs), must file income tax returns irrespective of profit or loss.

Trusts and Societies: Entities registered as trusts, societies, or charitable institutions, which have income exceeding the basic exemption limit, must file income tax returns.

Non-Resident Indians (NRIs): NRIs are required to file income tax returns in India if their income from Indian sources exceeds the basic exemption limit.
 

Persons claiming refund: Individuals who have excess taxes deducted or paid through advance tax or self-assessment tax are eligible for a tax refund and are required to file income tax returns to claim the refund.

Individuals with foreign assets:  Residents with foreign assets or foreign income, as well as those who qualify as ordinarily resident but not ordinarily resident (RNOR), may have additional filing requirements under the Foreign Exchange Management Act (FEMA) and may need to file an income tax return in India.

What is the last date to file ITR?
The last date to file Income Tax Return (ITR) in India varies depending on the type of taxpayer and certain conditions. Here are the general timelines for different categories of taxpayers for the Assessment Year 2023-24 (Financial Year 2024-25), as per the last update:

For Individuals (other than those covered in points 2, 3, and 4 below):
The due date for filing ITR is usually July 31st of the assessment year. However, this deadline may be extended by the Income Tax Department.

For Individuals and HUFs who are required to get their accounts audited under the Income Tax Act or under any other law:
The due date for filing ITR is typically September 30th of the assessment year. This includes individuals and Hindu Undivided Families (HUFs) whose accounts are required to be audited under the Income Tax Act.

For Businesses (other than those covered under points 2 and 4 below):
The due date for filing ITR is usually September 30th of the assessment year. This includes entities like companies, firms, LLPs, etc., which are not required to get their accounts audited.

For Businesses (covered under tax audit):
The due date for filing ITR is typically November 30th of the assessment year. This includes entities like companies, firms, LLPs, etc., whose accounts are required to be audited under the Income Tax Act.

 

What is the Late Filing Charges of ITR Under Section 234F of the Income Tax Act?  
Under Section 234F of the Income Tax Act, the penalty for late filing of Income Tax Return (ITR) depends on the timing of filing the return and the taxpayer's total income. Here are the penalty provisions:

- If the return is filed after the due date but on or before December 31 of the assessment year:
The penalty is Rs. 5,000.

If the return is filed after December 31 of the assessment year:
The penalty is Rs. 10,000.

However, there is a relaxation for small taxpayers whose total income does not exceed Rs. 5,00,000 
The maximum penalty is limited to Rs. 1,000 if the return is filed after the due date but on or before December 31 of the assessment year.

It's important to note that these penalties are applicable if the return is filed after the due date specified under Section 139(1) of the Income Tax Act, and there is a tax payable. If the taxpayer's total income is below the basic exemption limit and there is no tax payable, no penalty under Section 234F would be levied for late filing. Additionally, if the taxpayer's income is subject to tax audit provisions, different due dates and penalty provisions may apply.