Taxpayers Alert: Deadline for Income Tax Return (ITR) Filing Approaching

Taxpayers Alert: Deadline for Income Tax Return (ITR) Filing Approaching

Taxpayers Alert: Deadline for Income Tax Return (ITR) Filing Approaching

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As the financial year 2023-24 draws to a close, taxpayers are reminded of the impending deadline for filing their Income Tax Returns (ITRs). Failure to adhere to this deadline not only incurs penalties but also results in the loss of various tax benefits.

According to the Income Tax Act, individuals, companies, and other taxpayers are obligated to file their ITRs annually to report their income and the corresponding tax payments to the government. Missing the deadline can have serious repercussions, varying from financial penalties to forfeiting tax benefits.

The due date for filing ITRs varies depending on the taxpayer’s category. For instance, salaried individuals and those whose accounts are not required to be audited must file their ITRs by July 31. Conversely, taxpayers whose accounts require auditing have until October 31 to submit their returns.

Late filing of ITRs attracts penalties, as stipulated under Section 234F of the Income Tax Act. Currently, a penalty of Rs 5,000 is imposed on belated filings, with exceptions for taxpayers whose taxable income does not exceed Rs 5 lakh, who incur a penalty of Rs 1,000. Additionally, interest penalties may be levied under sections 234A/B/C for delayed payments or deferred advance tax payments.

One significant consequence of missing the deadline is the inability to opt for the old tax regime. Taxpayers filing their ITRs after the deadline are bound by the new tax regime, forfeiting the option to claim deductions available under the old regime.

Furthermore, late filers lose the benefit of carrying forward capital losses, thereby facing higher tax liabilities in subsequent years. Dr. Suresh Surana, Founder of RSM India, highlights this, emphasizing that while capital losses can be set off against capital gains during the year, carry forwarding losses beyond eight years is disallowed.

It’s imperative for taxpayers to understand the distinction between the financial year (FY) and Assessment Year (AY). The financial year represents the period in which income is earned, while the assessment year is when ITRs for that financial year are filed. For example, income earned in FY 2023-24 will be assessed in AY 2024-25.

With the deadline fast approaching, taxpayers are urged to file their ITRs promptly to avoid penalties and secure their tax benefits. Remember, missing the deadline not only impacts your current financial obligations but also has long-term implications for your tax liabilities and benefits.