ITR Filing 2024: What happens if you miss the July 31 deadline?

July is one of the most important months for taxpayers, as the deadline to file the income tax return (ITR) for the financial year 2023-24 will lapse at the end of this month.

What is ITR?

An income tax return is a declaration form that is submitted by the taxpayers to the Income Tax Department (I-T Department) mentioning all the income, expenditure, and other required information for a specific financial year.

What is the deadline for filing an ITR?

The deadline for filing ITR for the financial year 2023-24 and the assessment year 2024-25 is July 31. The financial year is the period in which your income is earned and calculated, from April 1 to March 31. Assessment year, on the other hand, is the year next to the financial year, during which the income will be assessed and taxed.

Put simply, the money you earned between April 1, 2023, and March 31, 2024, will be assessed and taxed this year, that is 2024-25.

Why should you file an ITR?

• Filing income tax returns informs the government about your tax liability and allows them to verify your income and the taxes you’ve paid on them.

• If you wish to avoid penalties and interest on any tax amount that you might owe, it’s important for you to file the ITR before the specified deadline, which is July 31.

• Additionally, a late fee will be applicable if you file an ITR after the deadline. A fine of ₹5,000 is charged under Section 234F as a late fee, and if your income is under ₹5 lakh per annum, you will be charged ₹1,000.

• If you have overpaid any amount in taxes, filing ITR on time will ensure timely refunds as well.

• If you fail to file your ITR before the deadline, you may not be allowed to carry forward your losses to the next year. ‘Carrying forward a loss’ can help you reduce your tax liability in the subsequent years but it may only be allowed if you file your ITR timely.

• ITR filing is often needed at the time of applying for a loan as many organisations ask for it as income proof.

What if you miss the deadline?

If you miss the July 31 deadline, you’ll still be eligible for filing an ITR as a ‘belated return’, up to three months before the assessment year ends. Meaning, you can file a belated return for this year until December 31, 2024. Belated returns come with penalties, interest, and the chance of losing many benefits.

What if you make a mistake while filing an ITR?

If you make a mistake while filing your income tax return, you are allowed to file an ‘updated return’, that acts as a revised ITR to correct returns filed on time or even belated returns. Usually, a taxpayer is allowed to file an updated return up to two years after the relevant assessment year ends. This means that you can file updated returns for this financial year until March 31, 2027, and your assessment year ends on March 31, 2025.

Notably, you cannot file for a reduced tax liability under an updated return. However, an updated ITR is helpful when you wish to disclose further income that you missed before in order to avoid penalties or legal implications.