In order to ensure that the assessors file their income tax return (ITR) on time, the Union Budget 2017 implemented the allowance of a late fee of up to Rs 10,000. Correspondingly, section 234F has been introduced in the Income Tax Act pertaining to a fee for delay in submitting return of income. Furnishing a return of income after the due date but on or before December 31 of the appraisal year would, in any other event, incur a late payment of Rs 5,000 and a fee of Rs 10,000, as mentioned u/s 23F. But if the total income does not surpass Rs 5 lakh, the amount of the fee will not surpass Rs 1000.
In the circumstance of a taxpayer assessing submitting the return after the deadline, the terms of Section 234F under the Income Tax Act, 1961 provide for the penalty levy as referred to in Section 139(1) of the IT Act. In the event that the return is submitted before 31 December of the appraisal year, the amount of that penalty amounts Rs 5,000 and will be raised to Rs 10,000 for filing the return after that date. Besides that, the late filing fee will be reduced to Rs 1000 in the case of such taxpayers whose overall income does not surpass Rs 5 lakh. Normally, unless extended, the ITR filing date for individuals/HUFs/organisations where the audit is not necessary is July 31 of the appraisal year and the audit date is September 30 where the audit is required.
The Covid-19 global epidemic and the nationwide lockdown placed to control the transmission of the virus, therefore, reflected in the extension of the deadline for different tax enforcement, including the due date of the ITR filing for the 2020-21 Assessment Year (AY). As a consequence, the deadline date for filing returns was first changed to 30 November 2020 instead of 31 July 2020, then to 31 December 2020 and eventually to 10 January 2021. Although the late fee of Rs 5,000 is levied from the close of the due date until 31 December of the financial year, it is eventually doubled. So, how much penalty will you have to pay when the extended January 10, 2021 due date is missed?
In the case of assesses on which the audit is not valid until 10 January 2020, the CBDT extended the due date for filing the tax return, but no subsequent relief was given in the context of late filing fees u/s 234F. Any taxpayer filing the return before 10 January 2020, to which the due date applies, will not be subject to the IT Act’s late filing penalties u/s 234F. That being said, any default will incur a penalty of Rs 10,000 u/s 234F after January 10, 2020. Not only Rs 5,000 but if you skip the deadline of January 10, 2021 (unless further extended) if you do not submit your ITR for AY 2020-21 at that time, the double late fee will be charged promptly.
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