Important Keyword: Belated ITR, Due date, Income Tax Website, ITR Utility, Sec 139(4).
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Section 139(4): Belated Return under Income Tax
Filing a Return of Income is the formal process through which taxpayers declare their total income and tax liability information. Compliance with tax obligations is bound by specific deadlines. Typically, the due date for filing an Income Tax return is the 31st of July of the relevant Assessment year. However, recognizing that taxpayers may miss this deadline, a provision for filing a belated return exists.
A belated return, as the name implies, refers to a return submitted after the deadline specified in the Income Tax Act. This option grants taxpayers a second chance to fulfill their tax obligations, albeit after the initial due date has passed.
What is a Belated Return?
Any individual who has failed to furnish a return within the specified time under section 139(1) of the Income Tax Act, has the opportunity to file a return for any previous year within certain limits. This can be done either before three months prior to the end of the relevant assessment year (which means by 31st December 2023 for the assessment year 2023-24), or before the completion of the assessment, whichever comes first.
For instance, consider the case of Surbhi who forgot to file her Income Tax Return for the financial year 2022-23 (assessment year 2023-24) by the deadline of 31st July 2023. She still has the option to file her return by 31st December 2023. However, it’s important to note that her return will be treated as a late return, filed under section 139(4) of the Income Tax Act, rather than under section 139(1).
Who can file a Belated Return u/s 139(4)?
From the financial year 2019-20 onwards, income tax return filing is compulsory under the following circumstances:
If an individual’s total income exceeds INR 2,50,000.
If the amount deposited in a current account held with a bank or cooperative bank surpasses INR 1 crore in a financial year.
Furthermore, individuals who are required to file their income tax return but have missed the original filing deadline still have the option to submit a belated return. To do so, taxpayers must select section 139(4) from the e-filing portal.
Consequences of late filing of ITR
Filing a Belated Return incurs the following consequences:
Interest Penalty under section 234A: The taxpayer is required to pay simple interest at a rate of 1% per month or part of a month for the delay in filing the Income Tax Return (ITR). This interest is calculated from the day immediately following the due date until the actual date of filing. For instance, if the due date is 31st July 2022 and the ITR is filed on 15th October 2022, the interest under section 234A will be applicable for 3 months.
Late Filing Fees under section 234F: The maximum penalty for late filing of a return is INR 5,000. However, the penalty amount varies based on the total taxable income:
If the total taxable income exceeds INR 5 lakh, the penalty is INR 5,000.
If the total income is less than or equal to INR 5 lakh, the penalty is INR 1,000.
If the total income is less than INR 2,50,000, no penalty is levied.
Limitations of filing u/s 139(4)
When filing a belated return, certain implications should be noted:
Losses Carried Forward: Losses under the heads of capital gains and Business and Profession cannot be carried forward if filing a belated return. However, losses from the head house property and unabsorbed depreciation can be carried forward even in case of a belated return.
Disallowed Deductions: Certain deductions are disallowed, including those under sections 10A, 10B, 80-IA, 80-IB, 80-IC, 80-ID, and 80-IE.
Interest on Refund: The taxpayer may lose interest on the refund under section 244A, if eligible, if the delay occurs due to the late filing of the taxpayer.
Change of Tax Regime: Changing the tax regime is not possible while filing a return under section 139(4).
Notice from Income Tax Department: If a person fails to file their belated return, the income tax department may send them a notice to file the return.
Important Keyword: E-Compliance Portal, Income Tax Return, Income Tax Website, IT Notice.
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Submit Response on E-Compliance Portal
In India, meeting income tax return deadlines is crucial to stay compliant with the law. Let’s simplify the key dates and consequences to ensure you’re on track with your tax obligations.
1. Original Income Tax Return (ITR) Filing Deadline:
For individuals not subject to tax audit: The deadline is July 31st following the end of the financial year.
For those undergoing tax audit: The deadline extends to September 30th after the financial year concludes.
2. Belated or Revised Return Filing Deadline:
If you miss the original deadline, you can file a belated return under Section 139(4) or a revised return under Section 139(5) until March 31st of the subsequent year.
Consequences of Missing Deadlines:
Failure to file by the due date leads to notifications from the Income Tax Department. They may reach out via email or SMS to remind non-filers about their obligations.
In the financial year 2018-19 (Assessment Year 2019-20), the Income Tax Department sent SMS alerts to numerous taxpayers who hadn’t filed their returns.
Remember, timely filing not only avoids penalties but also ensures you’re fulfilling your legal duties. Stay informed and meet your tax deadlines to enjoy a hassle-free tax season. If you have any doubts, consult a tax professional for guidance.
The Income Tax Department employs a sophisticated system called the Non-Filers Monitoring System (NMS) to track taxpayers who have not filed their income tax returns. Here’s a simplified breakdown of how it works:
1. Data Collection:
The ITD gathers information on taxpayers’ financial activities from various sources, including:
Annual Information Return (AIR)
Central Information Branch (CIB) data
Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) returns.
2. Analysis and Identification:
Using advanced algorithms, the ITD analyzes this data to identify individuals who should have filed income tax returns but haven’t.
3. Notice Issuance:
Based on the findings, the ITD issues notices to non-filers, notifying them of their potential tax liability.
These notices serve as reminders to taxpayers to fulfill their tax obligations and file their returns promptly.
Annual Information Return(AIR)
The Annual Information Return (AIR) serves as a vital tool for the Income Tax Department to monitor high-value transactions made by individuals and Hindu Undivided Families (HUFs). Let’s delve into its significance and the actions taken by the ITD for non-filers:
1. Reporting High-Value Transactions:
AIR requires specified entities to report various high-value transactions to the income tax department. These include cash deposits, credit card bills, mutual fund investments, purchase of immovable property, and more, surpassing specific thresholds.
2. Example Transactions Reported:
AIR-001: Cash deposits exceeding Rs. 10,00,000 in a savings bank account.
AIR-002: Credit card bills amounting to Rs. 2,00,000 or more.
AIR-003: Mutual fund investments totaling Rs. 2,00,000 or above, and so on.
3. Impact on Non-Filers:
For taxpayers who haven’t filed their income tax returns but have significant financial transactions reflected on the e-Compliance Portal, the ITD takes proactive measures:
Sending SMS alerts to remind them of their obligation to file returns.
Initiating queries to verify the information available on the e-Compliance Portal, ensuring accuracy and compliance.
Action to be taken for Income Tax Non-Filing Notice
If you’ve received a notice for non-filing of your income tax return via SMS, it’s essential to take prompt action. Here’s a straightforward guide on what to do:
1. File Income Tax Return or Submit Response:
a. Log in to your account on incometaxindiaefiling.gov.in. b. Navigate to Compliance > Compliance Portal. c. Click on e-Campaign. d. Under “e-Campaign – Non-Filing of Return,” select the relevant Financial Year. e. Choose “e-Campaign – Response on Filing of Income Tax Return” for the same Financial Year. f. From the dropdown menu, select your response and reason for non-filing. Specify the mode of filing. g. Provide the Date, Acknowledgement Number, and any Remarks. h. Click on Submit.
2. Confirm Information Provided:
a. Log in to your account on incometaxindiaefiling.gov.in. b. Visit Compliance > Compliance Portal. c. Click on e-Campaign. d. Select “e-Campaign – Non-Filing of Return” for the applicable Financial Year. e. Under “e-Campaign – Information Confirmation,” choose the same Financial Year. f. Click on the tab to view transactions and validate the information provided.
By following these steps diligently, you can respond to the non-filing notice efficiently and ensure compliance with income tax regulations. It’s crucial to stay proactive and address such notices promptly to avoid any potential penalties or further inquiries from the Income Tax Department.
