As the year comes to a close, taxpayers are running out of time to address their income tax filings for the fiscal year 2024–25. The deadline to submit a belated or revised income tax return (ITR) is approaching on December 31. Failure to meet this deadline can result in missing out on crucial financial benefits.
It is a common misconception that tax issues can be rectified after the deadline passes. However, tax regulations make it challenging to make changes once the deadline has lapsed.
Filing a belated return serves as the last opportunity for individuals who missed the initial July deadline. Nevertheless, filing late incurs penalties. Under Section 139(4) of the Income Tax Act, a fixed penalty of Rs 5,000 is imposed. For individuals with a taxable income below Rs 5 lakh, the penalty reduces to Rs 1,000. Those earning below the basic exemption limit of Rs 3 lakh are not subject to any penalties.
Missing the deadline entirely results in the inability to file a belated return later. This closes off avenues to claim refunds or carry forward specific losses for that assessment year.
A belated return enables taxpayers to claim tax refunds and report eligible losses. Failing to file this return results in the forfeiture of these benefits for the year. Following December 31, the only option left is to submit an updated return, but it comes with stringent conditions. An updated return can only be filed if it leads to additional tax liability and cannot be used to claim refunds, reduce tax liability, or report losses.
If the tax department issues a notice at a later stage, individuals may face increased interest and penalties due to the absence of a belated return filing.
Revised returns offer a final opportunity to rectify errors. Individuals can address errors such as unreported income, incorrect deductions, or inaccurate bank account details by filing a revised return before December 31. Missing this deadline precludes further revisions for that assessment year. While updated returns are permissible, they cannot be used in scenarios where:
– Individuals can still revise their return even after receiving an intimation under Section 143(1).
– However, once a scrutiny assessment under Section 143(3) is concluded, no further revisions are permitted.
– According to Section 139(5), taxpayers can revise their ITR up to three months before the end of the assessment year or before the completion of the scrutiny assessment, whichever occurs first.
Taking action before December 31 is crucial for taxpayers. This period represents the final opportunity to rectify errors, claim refunds, and report losses. Failing to meet this deadline significantly limits available options and may result in additional penalties later on.
It is imperative for individuals to review their filings, rectify any errors, and avoid last-minute complications. Investing a few moments now can save both money and stress in the coming months.