Tax breaks that you’ll forgo on failing to file ITR on time

The due date to file earnings tax returns (ITR) for the evaluation 12 months 2022-’23 (monetary 12 months 2021-’22) is 31 July. This deadline is for particular person taxpayers who don’t must get their accounts audited. Missing the deadline not solely attracts penalty, however additionally, you will must forgo sure tax breaks whenever you file belated returns, . 

Penalty for late submitting

Those who miss the deadline of 31 July can file a belated ITR until 31 December, however they should pay a late submitting payment. For incomes above ₹5 lakh, the late submitting payment is ₹5,000, whereas others must pay ₹1,000. 

Late submitting payment will even apply to these taxpayers who could have earnings beneath the tax exemption restrict of ₹2.5 lakh however are mandatorily required to file ITR. This consists of taxpayers who maintain a international asset or have earned international earnings, paid over ₹1 lakh in electrical energy invoice throughout the monetary 12 months, deposited over ₹1 crore in a number of financial institution accounts and paid over ₹2 lakh on international journey for self or household. 

Interest on due tax

If you might have excellent tax after the 31 July deadline, you will have to pay month-to-month easy curiosity of 1% on the excellent quantity. “This kicks in from the primary day of the month and applies even for half month,” said Karan Batra, co-founder, charteredclub.com.  For instance, if you pay the outstanding tax on the fifth day of a particular month, you will need to pay 1% interest for the full month.

Prakash Hegde, a Bangalore-based chartered accountant, said if the tax department, after assessing your ITR, asks for additional tax that you have missed calculating correctly, then you will have to pay  interest on that additional amount with retrospective effect. 

Can’t carry over losses

Taxpayers can reduce their tax liability by offsetting losses from capital assets and business against other incomes, subject to conditions as laid out in IT Act, and even carry forward unsettled losses to subsequent years, as applicable to different income heads. But, carrying forward the losses is not permitted in the ITR filed belatedly. 

“One can still offset losses but can’t carry it forward to offset it against future incomes. However, capital loss from house property is exempt from this rule and can be carried forward to the next assessment year,” stated Hegde.

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