Understanding Belated Returns in Income Tax Filing

In an income tax filing, missing the initial deadline can be stressful, but all is not lost. Section 139(4) of the Income Tax Act, 1961, provides a lifeline known as the Belated Return, allowing individuals to file their income tax returns after the original deadline but before the extended one, which is December 31st of the assessment year.

Consequences of Late Tax Filing:

The repercussions of filing a return after the deadline are not to be taken lightly. Penal interest under
section 234A and the late filing fee under section 234F are applicable. For total revenues under ₹5 Lakhs, the late filing fee cannot exceed ₹1,000, but after the specified dates, higher fees may apply.
Impact on Deductions: Late filers may lose out on deductions under crucial sections like 10A, 10B, 80- IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, 80-IC, 80-ID, 80-IE, 80JJA, 80JJAA, 80LA, 80P, 80PA, 80QQB,
and 80RRB. Additionally, some losses cannot be carried forward if the return is filed after the deadline.

Solution to late filing: Revising Belated Returns and Claiming Refunds

Section 139(4) allows for the revision of belated returns before the end of the relevant assessment period. Furthermore, taxpayers can claim a tax refund with a belated income tax return, provided the return is e-verified and the bank account pre-validated for a seamless refund process.

Limitations and Repercussions of Belated Returns:

While the Belated Return offers a second chance, it comes with its own set of disadvantages. Late filing may attract interest under sections 234A, 234B, and 234C. A late fee is also levied based on your gross total income, discouraging procrastination.
Losses, like business and capital losses, face restrictions on carry-forward, with exceptions for losses from house property. Moreover, certain deductions and exemptions under sections 10A, 10B, 80-IA, 80- IB, 80-IC, 80-ID, and 80-IE are disallowed if the return is filed after the original deadline.

Who is eligible to submit a Belated Return under section 139(4)?

Income tax return filing is obligatory in the following instances:

  1. When an individual’s total income surpasses INR 2,50,000.
  2. If the amount deposited in a current account with a bank or cooperative bank exceeds INR 1 crore in a financial year.
  3. If you have spent more than 2 lakhs on foreign travel in the relevant year.
  4. Your total electricity bill exceeds Rs.1 lakh.

In brief, individuals who must file their income tax returns Delhi and have missed the original deadline can opt for filing a belated return.

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