Income Tax returns deadline extended; penalties await late filing and falsified reporting

While the due date for filing of Income Tax returns has been extended, let us look at the consequences of a delay in filing and incorrect disclosure of income

Income Tax returns deadline extended; penalties await late filing and falsified reporting

The deadline for filing your income tax return (ITR) for FY 2019–20 has been extended to 30 November 2020. Although the last date is usually 31 July, this year’s extension comes as a part of the coronavirus relief package. Under the Income Tax Act, failure to file your ITR before the deadline and committing mistakes like misreporting and under-reporting will attract a fine.

The penalty is charged on late filing of ITR under section 234F of the IT Act. For filing ITR after the due date but before 31 December 2020, a penalty of Rs 5000 will be charged. In case of returns filed after 31 December 2020, the penalty amount is Rs 10,000. For those falling in the income bracket of less than Rs 5 lakh per annum, the amount is Rs 1000.

Related: What documents to keep ready while filing your ITR? 

Under-reporting and misreporting of income is penalised under section 270A(1) of the IT Act. There is a fine of 50% of the tax payable on under-reported income if the person is found to have under-reported their income. It is worth noting that this is in addition to the tax on the under-reported income. However, if it is found that the person has wilfully misreported his or her income, the penalty charged will be 200% of the tax payable on the under-reported income.

Some common instances of misreporting include suppression of facts, a false declaration in books of accounts (such as false entry), not declaring investments, recording unverifiable expenditure, suppressing the total income, and not reporting international transactions.

Related: Income Tax Returns: Who should file them and when? 

Are there any changes in the FY 2018-19 deadline as well?

The due date for filing the ITR for FY 2018–19 was originally extended from 31 March 2020 to 30 June 2020. In June it was further extended by a month to 31 July 2020. The IT department later confirmed that it has extended the date again, this time by two months. As of now, the due date for filing ITR for FY 2018–19 stands at 30 September 2020.

How does Section 234F of the IT Act recover late fees?

If you default on filing ITR under section 234F, you will have to pay the applicable late fees through challan 280. For ‘Type of Payment’ select ‘Self-Assessment Tax’ and mention the words ‘Late fee’ in the ‘Others’ column. 

Related: e-Filing “Lite” Version Launched for Tax Payers

When is Section 270A(1) of the Income Tax Act applied?

Under section 270A(1), the Assessing Officer, Commissioner (Appeals), Principal Commissioner, or Commissioner may direct a person to pay the penalty in addition to tax. This will be charged on the under-reported income found during the proceedings. Such proceedings may be assessment proceedings, appeals, or revisionary proceedings. The section mentions that the authority ‘may’ direct the person, which indicates that the penalty doesn’t become applicable automatically. This direction comes at the discretion of the aforementioned authority. Look at these 5 Tax filing mistakes that can get you a tax notice


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