Know the details of Filing Income Tax Return after the due date without Penalty

As we are aware of the fact that for the financial year 2020-21, the deadline to file income tax return (ITR) was December 31, 2021, it was extended twice, firstly from the usual deadline of July 31, 2021, to September 30, 2021, and then to December 31, 2021 due to the pandemic.

If a taxpayer missed the ITR filing deadline, they will have to pay the penalty. However, there are some individuals who can file their income tax without a penalty even after the due date.

Who can file ITR after the due date without Penalty?

As per section 234F of the Income-tax Act, taxpayers must pay a penalty for delay in filing ITR. In simple words, if you fail to file your tax returns within the deadline for the current year i.e., 31st of December, you might end up paying up to INR 5,000 as penalties.

However, there will be no late filing fees to be levied as mentioned under section 234F on the ITR filed after the deadline if the gross total income does not exceed the basic exemption limit.

Example

Mr. B, having total income of Rs. 2.4 lakh, if he files his Income-tax return for Assessment Year 2021-22 (Financial Year 2020-21) on February 7, 2022. What will be the penalty under section 234F?

Since the total income of Mr. B is less than 2.5 lakh, no penalty will be levied under section 234F till the last date of filing.

Exception

There are two exceptions even in the case where the individuals who fit the basic exemption limit criteria. Certain individuals are required to mandatorily file ITR even if the gross total income is lower than the basic exemption limit.

Firstly, under Section 139(1), in the various cases the filing of Income Tax Return is Mandatory namely:

• Every person who has a total income that exceeds the exemption limit is liable to furnish Income Tax Return within the due date
• Any private, public, domestic or foreign country located and/or doing business in India
• Any firm including LLP (Limited Liability Partnership) or Unlimited Liability Partnership
• Any resident who has an asset located outside of India (might include financial interest in some entity as well) OR any resident who retains signing authority for an account based outside India – for all these cases Tax return needs to be filed mandatorily in the prescribed form irrespective of the amount of tax liability on those incomes
• Every HUF (Hindu Undivided Family), AOP (Association of Persons) and BOI (Body of Individuals) – if the total income of these bodies or entities exceeds the prescribed exception limit, they are liable to file the Income Tax Return in the prescribed format with required documentation

Secondly,  when a taxpayer owns foreign assets such as stocks of a foreign company. Simply put, if your gross total income is below the basic income threshold but you have income from foreign assets, then you are required to pay a penalty for late ITR filing.