Fulfilling the obligation of filing Income Tax Returns (ITR) is a crucial responsibility for all taxpayers in India. This process ensures adherence to the tax regulations of the country and encompasses the declaration of all income sources, deductions, and tax obligations to the Income Tax Department.

The deadline to submit your Income Tax Return (ITR) for the Financial Year 2023-24 (Assessment Year 2024-25) without incurring a late fee is July 31, 2024. Filing after this date will result in the application of interest under Section 234A and a penalty under Section 234F. If you miss the initial deadline, you still have the option to file a belated return by December 31, 2024.

--------------Blog Contact Form-------------

When do we Submit our Income Tax Returns (ITR)?

Taxpayers are required to annually file their Income Tax Returns (ITR), disclosing their income and financial details for a specific financial year (FY). For the Assessment Year (AY) 2024-25, the filing of ITR commences on 1 April 2024, with the deadline for filing being 31 July 2024.

Failure to file your Income Tax Return punctually may lead to penalties and notifications from the Income Tax Department. To avoid these repercussions, ensure that you accurately complete and submit your ITR within the specified deadlines.

Read Our Blog: Tax Return

What is Financial Assessment (FY) and Assessment Year (AY) in Income Tax?

The terms Financial Year (FY) and Assessment Year (AY) play a crucial role in income tax filing and assessment.

• Financial Assessment (FY): The period in which income is earned is referred to as the Financial Year (FY). For instance, FY 2023-24 would include the time from 1st April 2023 to 31st March 2024. Individuals and entities earn income during this period, which will be evaluated for tax purposes.
• Assessment Year (AY): It is the year that immediately follows the financial year in which the income is earned. It is when taxpayers submit their income tax returns, disclosing their income, deductions, exemptions, losses, and so on, which were incurred or made during the previous financial year (FY). For example, for income earned during FY 2023-24, the assessment year would be AY 2024-25, from 1st April 2024 to 31st March 2025.

When does the ITR filing for FY 2023-24 (AY 2024-25) begin?

E-filing for Income Tax Returns (ITR) usually begins on April 1st of the assessment year for any financial year.

The Financial Year 2023-24 (Assessment Year 2024-25) started on April 1st, 2024. Here, we will go over the deadline for filing ITR for FY 2023-24.

Due dates for filing Income Tax for the Financial Year 2023-24 (Assessment Year 2024-25) are as follows:

What is the Rationale behind filing your Income Tax Return (ITR) before July 31?

The government insists on the punctual submission of income tax returns. This responsibility entails individuals and organizations providing accurate declarations of their income, availing deductions and exemptions, and meeting tax payment deadlines. On-time filing of ITR supports effective tax evaluation and revenue collection, ensuring the seamless delivery of public services and welfare programs.

Below are the convincing factors to submit your ITR promptly:

• Minimize Penalties and Interest Charges: Filing your taxes on time helps avoid incurring penalties as per the Income Tax Act. Late filing can result in penalties of up to Rs. 5,000 for income exceeding Rs. 5 lakh and Rs. 1,000 for income up to Rs. 1 lakh.
• Ensure Accurate Tax Reporting: Filing your taxes early provides ample time to gather the necessary documents, ensuring precise and complete tax return filings and reducing the likelihood of errors or omissions.
• Claim Refunds promptly: Filing your taxes promptly allows you to claim any refunds if you have overpaid taxes. Early submission expedites the processing of refunds by the Income Tax Department.
• Utilize Loss Adjustment Benefits: Timely filing enables the carrying forward of losses incurred during the year to offset future profits, ultimately reducing tax liabilities in subsequent years.
• Ensuring a Good Credit Score: When applying for loans or credit cards, banks and financial institutions often request ITR to prove financial stability. By filing taxes on time, you can show financial responsibility and improve your creditworthiness.
• Avoiding Procrastination: Submitting your taxes early helps you avoid the stress and potential problems that come with last-minute filings, ensuring that you comply with tax regulations without rushing.
• Enhancing Financial Planning: Early tax filing allows for better financial planning for the upcoming fiscal year based on accurate tax responsibilities and potential refunds.

What happens if the deadline for filing your Income Tax Return (ITR) is Missed? 

Here are the potential consequences:

• Interest: If you don't file on time, you'll have to pay interest at a rate of 1% per month or part month on the unpaid tax amount as per Section 234A.
• Late Fee: Late filing incurs a penalty under Section 234F, with a fine of Rs. 5,000, which is reduced to Rs. 1,000 if your total income is below Rs. 5 lakh.
• Loss Adjustment: Filing your ITR on time is important if you have experienced losses from investments or business activities because it allows you to carry forward these losses to offset future income tax liabilities. However, this benefit is forfeited if you miss the filing deadline.

If the ITR deadline is missed, there are ways to rectify the Situation

• Filing a Belated Return is an option under Section 139(4) of the Income Tax Act, allowing for the filing of a belated return for FY 2023-24 (AY 2024-25) until December 31, 2024. However, this late filing results in penalties and interest charges, and the option to carry forward losses is limited to those related to house property.
• ITR-U, introduced under the Finance Act 2022, enables taxpayers to update their income tax returns within two years from the end of the relevant assessment year. This option is useful for rectifying omissions or errors in original or overdue returns.

Please be aware that submitting a revised return could result in extra taxes: 25% of the tax and interest owed within the initial year and 50% if filed in the second year after the original due date.

Read Our Blog: What is the Tax Audit Limit For The AY 2023-24?

Key Deadlines for Submitting Advance Tax Payments for FY 2023-24

Adhering to income tax regulations includes meeting various important timelines, such as submitting tax returns and making timely advance tax payments. Taxpayers are required to observe specific due dates for advance tax payments during the financial year 2023-24.

Conclusion

Conclusively, all Indian taxpayers need to adhere to the specified ITR filing deadlines to remain compliant and evade penalties. Timely filing of ITR demonstrates financial discipline, facilitates precise financial reporting and tax payments, and contributes to the development of the nation's infrastructure and public services. By submitting your tax returns by the July 31, 2024 deadline, you can steer clear of accruing interest, late fines, and the complexities associated with filing returns after the due date.