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Section 234F: Penalty for Late Filing of ITR

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Hiral Vakil

Income Tax Filing
ITR Penalty
Section 234F
Last updated on July 28th, 2021

What is Section 234F?

In Budget 2017, the government inserted a new section under the income tax act to penalize late filers of a tax return. From FY 2017-18, in case of delay in filing of a tax return by an individual whose income exceeds basic exemption limit penalty is levied u/s 234F.

Who is Covered u/s 234F?

Individuals, HUFs, Company, Firm, AOP, etc. will be covered under the scope of section 234F of income tax act. All persons will be liable to pay the late filing fees in case the miss the deadline to file their returns.

The due date to file the ITR for AY 2021-22 has been extended from 31st of July to 30th of September 2021
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The due date to file the ITR for AY 2021-22 has been extended from 31st of July to 30th of September 2021

Penalty u/s 234F for Late Filing of ITR

Penalty u/s 234F

Let’s take an example to understand it better:

Ajay is a salaried individual and he forgot to file his return for FY 2017-18. His total income for a year is INR 7,20,000. TDS on his salary income has been deducted by his employer. And he decided to file his return on 12th March 2019.

In this case, even though TDS has been deducted from his income. Ajay will be penalized with late filing fees of INR 10,000. Since his income is more than INR 5,00,000.

How to Pay Penalty u/s 234F?

Taxpayers shall use the respective challan for self assessment tax i,e, Challan 280 to pay the penalty for late filing fees. Select type of payment as “Self Assessment (300)”. You will receive a BSR code on the successful payment of the tax. Mention the BSR code and the challan number whilst filing your return.

Challan 280 - Self Assessment Tax Payment Option

There might be a probability where the Income Tax Department deducts excess TDS. We could use the same excess TDS deducted to adjust it against the late filing fees of 234F. Taxpayers would have received this excess TDS by way of refund.

Rules to Carry Forward Losses

It is imperative that taxpayers who trade and have incurred losses file their returns on time. In case they don’t file their returns on time, they won’t be allowed to carry forward their losses in to the next years to set off against income in future years.

FAQs

Can we file the Income Tax Return (ITR) without paying the tax?

The Income Tax Returns (ITR) can be filed only if we have paid the tax due to the government. If you submit the ITR without paying then your Income Tax Return can be declared Defective.

What is Section 234F?

As per Section 234F of Income Tax Act, if a person is required to file Income Tax Return (ITR) as per the provisions of Income Tax Law [section 139(1)] but does not file it within the prescribed time limit then late fees have to be deposited by him while filing his ITR form.

What is the penalty for the late filing of ITR u/s 234F?

– Taxpayers earning income between INR 2.5 Lakh to INR 5 Lakh will have to pay a fine of INR 1,000
– Taxpayers earning income above INR 5 Lakh will have to pay a fine of INR 5,000 if the ITR is filed before December 31st of the Assessment Year
– Taxpayers earning income above INR 5 Lakh will have to pay a fine of INR 10,000 if the ITR is filed after December 31st of the Assessment Year

Got Questions? Ask Away!

  1. Hey @TeamQuicko

    I have LTCG of more than 7 lakhs from the equity for this year. Is there a way to reduce my tax liability? Also, do I have to pay the tax in advance? If I fail to do so, what will be the penalty/interest percentage I have to pay during my tax filing in 2020?

  2. Hi @vivek25,

    You are liable to pay advance tax if your total outstanding tax liability for the financial year after TDS is above INR 10,000.

    To calculate your advance tax liability you need to add your estimated income for the financial year from all sources including - Salary, House Property, Capital Gains, Business & Profession and other sources.
    Next, subtract all eligible deductions, expenses, and Tax Credit available to you.
    Now, if your outstanding tax liability is above INR 10,000, you need to pay advance tax to avoid penalty u/s 234B and 234C.

    Hope this answers your query :slight_smile:

    You can also use the advance tax calculator to know your advance tax liability under the old and new tax regime

  3. Hi
    When I pay the advance tax through the ZERODHA-QUICKO platform, does it get saved/stored? For example I have paid for Q1. so when I have to pay for Q2, will this be automatically calculated?
    Thanks

  4. I have paid the Advance tax of Q1, but didn’t received any email from income tax portal! So, Is that normal? I received the Challan No. receipt, but no email from IT portal!

  5. Hey @Gaurav,

    Once you pay the Advance Tax, you have an option to download the challan. In case you missed downloading it, the tax credit for the same will be reflected in your Form 26AS.

  6. Hey Girimon_Vasudevan,

    When you pay advance tax through our tax planner app, you should download the challan and then you
    need to add the it the advance tax toggle under the tax credits in the tax planner tab to see your tax credits reflected in the appropriate quarter.

  7. @Nireka
    Thanks. I have done it for the current year.
    I did not do it for the last year. How can I add it now?

  8. Hi @Girimon_Vasudevan,

    If you missed paying advance tax last year, then the interest penalty may be applicable u/s 234B & 234C.
    You can pay that as along with your self-assessment tax the filing your Income Tax Return

  9. Sorry, I didn’t miss the payment. I missed to add it in the tax credit on your portal. I am unable to add it now.

  10. @Girimon_Vasudevan, once you login to the Tax Planner navigate to Tax Planner > Income Situation > Tax Credits to add the tax credits.

    If you face any issue can write to us at help@quicko.com and our team will be happy to assist you.

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