Important Keyword: Income Tax Filing, ITR Penalty, Section 234F.

Section 234F: Penalty for Late Filing of ITR

“There’s a cost to tardiness, as seen with late tax filers facing penalties for missing deadlines. The government introduced Section 234F in the Income Tax Act during Budget 2017 to enforce a late filing fee.”

What is Section 234F?

Section 234F of the Income Tax Act pertains to the late filing fee applicable if a person required to file an Income Tax Return (ITR) under section 139(1) fails to do so within the specified time limit. The taxpayer must then deposit late fees when filing their ITR form.

The amount of late fee varies based on the taxpayer’s total income. It is important for taxpayers to file their ITR within the due date to avoid these penalties u/s 234F.

Who falls under the purview of Section 234F?

Section 234F of the Income Tax Act applies to the following entities:

1. Individuals
2. Companies
3. Firms
4. Hindu Undivided Families (HUFs)
5. Associations of Persons (AOPs)
6. Bodies of Individuals (BOIs)
7. Local Authorities
8. Every Artificial Judicial Person not covered above

If any of these entities fail to file their Income Tax Return (ITR) within the prescribed time limit under section 139(1) of the Income Tax Act, they will be liable to pay late filing fees as per Section 234F. Thus, it is crucial for all these entities to ensure timely submission of their ITR to avoid penalties.

Fees for Late Filing of ITR u/s 234F

The quantum of the fees depends on the Taxable income of the taxpayer.

Let’s take an example to understand it better:

In the case of Akash, a salaried individual who forgot to file his Income Tax Return (ITR) for the financial year 2022-23, the following applies:

Total Income: Akash’s total income for the year is INR 7,20,000.

TDS Deducted: His employer has already deducted TDS (Tax Deducted at Source) from his salary income.

Late Filing: Akash filed his ITR on 31st October 2023, missing the original due date of 31st July 2023.

As per Section 234F of the Income Tax Act:

Since Akash’s total income exceeds INR 5,00,000, he is liable to pay a late filing fee.
The late filing fee under Section 234F, when filing after the due date but before 31st December of the assessment year, is INR 5,000.
Therefore, despite TDS being deducted from his income, Akash will be penalized with a late filing fee of INR 5,000 for filing his return after the due date.

How to Pay Fees u/s 234F?

Taxpayers can pay the late filing fees from the IT Portal

Select the type of payment as “Self-Assessment (300)” and enter the late filing fees amount in the “Others” column (taken as ₹5000 based on the example above) as can be seen below.

After successfully completing the tax payment, a challan receipt will be generated containing all necessary details. When filing the return, it’s important to mention the BSR (Basic Statistical Return) code and the challan number from this receipt.

In cases where there is excess TDS deducted, taxpayers can utilize this surplus to offset the late filing fees under Section 234F. This adjustment helps in reducing the penalty amount effectively.

Read More: Income Tax Payment

Web Stories: Income Tax Payment

Official Income Tax Return filing website: https://incometaxindia.gov.in/