Return of Income is the format in which the taxpayer furnishes their total income and tax payable information. Every compliance comes with a timeline. Similarly, the due date to file an Income Tax return is 31 July of the relevant Assessment year. However, to give the taxpayer a second chance to meet their tax obligation an option to file a belated return is provided. As the name suggests, a belated return is a return that is filed after the due date specified in the Income Tax Act.
What is a Belated Return?
Any person who has not furnished a return within the time allowed under section 139(1), may furnish the return for any previous year at any time-
(i) before three months prior to the end of the relevant assessment year (i.e. 31 December 2023 for PY 2022-23); or
(ii) before the completion of the assessment,
Whichever is earlier.
For example, Surbhi forgot to file ITR for FY 2022-23 (AY 2023-24) on or before 31st July 2023. Here she can still file ITR by 31st December 2023. But her return will be considered as a late return. It will be filed under section 139(4) of the Income Tax Act and not u/s 139(1).
Who can file a Belated Return u/s 139(4)?
From FY 2019-20 onwards income tax return filing is mandatory in the following cases:
- If a person’s total Income is more than INR. 2,50,000
- The amount deposited in a current account held with a bank or cooperative bank exceeds INR 1 crore in a financial year;
Shortly, the assessee who is required to file ITR and has missed the original filing deadline can file a belated return. For this taxpayers need to select section 139 (4) from the e-filing portal.
Consequences of late filing of ITR
The following are the consequences of filing a Belated Return:
The taxpayer is liable to pay simple interest at 1% per month or part of a month for delay in filing ITR. The calculation of interest will be from the date after the due date until the actual date of filing. For example, if the due date is 31/07/2022 and ITR is filed on 15/10/2022 then interest u/s 234A is levied for 3 months.
The maximum penalty for late filing of a return is to ₹5,000/-.
- If the total taxable income is greater than INR 5 Lakh, then the penalty levied is INR 5,000/-.
- If the total Income is less than INR 5 Lakh, then the penalty levied is INR 1,000/-
- If the total income is less than INR 2,50,000, then no penalty is levied.
Limitations of filing u/s 139(4)
- Losses are not allowed to be carried forward under the heads of capital gains and Business and Profession. However, losses from the head house property and unabsorbed depreciation can be carried forward even in case of a belated return.
- Some of the deductions are also disallowed which include deductions, under sections 10A, 10B, 80-IA, 80-IB, 80-IC, 80-ID, and 80-IE.
- Furthermore, the taxpayer can lose interest on the refund under section 244A, if eligible, if the delay happens due to the late filing of the taxpayer.
- The change of the Tax regime is not possible while filing a return under section 139(4).
If a person still fails to file his or her belated return, the income tax department may send them a notice to file the return.
Yes. From FY 2016-17 (AY 2017-18) onwards Belated Return can be revised. Belated Returns of earlier years can not be revised.
Yes, ITR can be filed after the due date. But it will be considered a Belated Return and late filing fees will be levied.
Yes. A taxpayer needs to e-verify the Belated Return filed after the due date. It will not be processed by the IT Department unless it is e-verified.
Yes, You can claim a refund of extra tax paid while filing a belated return u/s 139(4). The refund will be credited directly to your bank account mentioned in ITR. Make sure to pre-validate your bank account to easily process a refund.