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Consequences of late filing of ITR

Vedanta Deshika


Consequences of late filing of ITREvery assessee should know some basics of Income tax before analyzing the consequences. 

Due date of filing of Income Tax Return for Assessment Year 2014-15 ( i.e Previous Year 2013-14) is

1. Accounts not liable to be Audited :- 31st July 2014

2. If you are a business man / company who is liable to be audited under any law , then 30th September 2014.

Everybody thinks that Income tax Department will impose heavy penalty if we dont file ITR in time. What is amount of penalty  ??

To be honest and straight to the point , there is no penalty. Trust me. You are reading it right. 

But he may levy penalty u/s 271F of Rs 5000 only if you delay in filing ITR before 31st March 2015.

He may levy is to mean that it is his discretion to levy or not.

Then, why people still worry about the Due dates??

The reason is the Due date for filing ITR is linked to various other benefits under Income tax act. Some of the impacts for late filing ITR are as follows

1. You cannot carry forward Business loss (including Speculation) , capital loss , loss due to owning and maintaining of race horses etc ,However you may setoff previously brought forward losses 

2. You will lose interest on refund if you are claiming a major amount of refund

3. You cannot revise the ITR incase you have made some mistakes in original ITR

4. If you have Self Assessment Tax to be paid, interest @ 1% will have to be paid u/s 234A. You may also have to bear Interest u/s 234B , 234C

So, as a matter of Prudence, we advise you to file ITR in time so that you dont loose other benefits that comes in handy.

 However, for business , one can still carry forward Losses under Income from house property, Unabsorbed depreciation, Unabsorbed Capital expenditure on Scientific research even if ITR is filed after due date. But, filing is required.

However, one has to be also careful of another dangerous , draconian section 276CC. This section can be used by the department if the assessee fails to File ITR.  This section provides powers to prosecute the assessee

If the tax evasion amount exceeds Rs 25,000  - Imprisonment min 6 months , max 7 years plus fine

In any other case - Imprisonment min 3 months , max 3 years plus fine

However, department has to prove

1. Wilfull delay in filing ITR

2. Intention to evade income tax

So far the cases of 276CC notices are very less but the future is  bleak. We have to act safe.

File your ITRs in time and rest all the possibilities of invoking this section.

Happy ITR Filing 

CA Pulkit Sharma


As a chartered accountant, my advice to everyone is to file the returns on time.

Filing your returns will not only help you in avoiding the penal punishments but will help you in getting loans, Visa, credit cards etc.