Income Tax Returns: File Before December 31 to Avoid Penalty and Legal Action

If you haven’t filed your Income Tax Return (ITR) yet, the clock is ticking. The last chance to file your delayed return for the financial year 2023-24 (assessment year 2024-25) is December 31, 2024. Taxpayers who miss this extended deadline will face hefty fines and legal consequences.

Key Deadlines and Late Fees

1. Original Deadline: The original due date to file ITR was July 31, 2024.
2. Extended Deadline: Taxpayers who missed the July deadline can still file their delayed returns under Section 139(4) until December 31, 2024, but with a penalty.
3. Late Fee: Under Section 234F of the Income Tax Act:
   • ₹5,000 late fee for income above ₹5 lakh.
   • For income below ₹5 lakh, the late fee is ₹1,000.

What Happens If You Miss December 31?

Failing to file your ITR even by December 31 can lead to severe consequences:

• Higher Penalty: A fine of up to ₹10,000 for annual income exceeding ₹5 lakh.
• Legal Action: The Income Tax Department may take further legal measures, including prosecution.
• Financial Losses: You may lose the ability to offset certain losses (like capital losses) against future earnings.
• Foreign Assets Disclosure: December 31 is also the deadline to declare any foreign assets or income. Hiding this information could attract a penalty of up to ₹10 lakh.

Risk of Jail Term

In extreme cases, taxpayers who fail to file their returns or disclose crucial financial information may face imprisonment under the provisions of the Income Tax Act.

To avoid heavy penalties, legal complications, and financial losses, ensure you file your Income Tax Return by December 31, 2024. Delays not only result in monetary fines but can also lead to further legal repercussions. Act promptly and fulfill your tax obligations to stay compliant and stress-free.