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Income Tax Department to Refund Late ITR Filing Fee

Everyone including HUF, Individuals, Partnership Firms, Companies, etc. are liable to pay penalty for late tax filing fees u/s 234F if it is not filed within the respective due dates.

The deadline to file Income-tax Return (ITR) for FY 2018-19 was extended to August 31, 2019 by the Income Tax Department. Those who filed return later would have to pay a late fee of up to INR 10,000. And if your taxable income is below the taxable limit then there is no need to pay the penalty even if you file your ITR after the deadline. Below are some of the reasons why:

The Penalty that you will Have to Pay Tax

The penalty for filing late ITR is as follows:

  • The penalty fixed by the Income tax department is Rs. 5000 if the Income tax return is filed after the deadline on or before December 31, 2019 of the relevant assessment year
  • The penalty fixed by the Income tax department is Rs. 10000 if the Income tax return is filed

after December 31 i.e. between January 01, 2020 and March 31, 2020 of the assessment year

  • And if your gross total income is not more than Rs. 5 lakhs then your maximum penalty is Rs 1,000 only

Income tax department introduced this law of late filing fees u/s 234F in the Budget 2017 which became effective from assessment year 2018-19 onwards. Assessment year is basically the subsequent year after the fiscal year for which the Income Tax Return is filed, so for the financial year 2018-19 the assessment year is 2019-20.

Who is not Liable to Pay Tax the Penalty?

Though, the Chartered Accountants are of the viewpoint that if the tax payer’s gross total income is within the basic exemption limit and he/she files a late return, then no penalty will be charged.

At present, the basic tax-exemption limit for taxpayers below the age of 60 years is INR 2.5 lakh. People between the age group of 60 years and 80 years with income up to INR 3 lakh are not liable to pay tax.

And people above 80 years the basic tax-exemption limit is up to INR 5 lakhs.

Tax Payers were Mistakenly Charged a late ITR Fee

So, if you have paid a late fee, and have been wrongly charged, you will get a refund.

The income tax department admitted to an unintentional error while processing of the ITR- Income Tax Returns of partners of firms whose accounts were liable to be audited. The taxman assured the error will be rectified on its own and the late fee charge will be removed.

This suo-moto rectification to remove the late fee charged u/s 234F while processing of the ITRs is first-of-its-kind. Section 234F was introduced to ensure that Income tax returns are filed timely.

However, unintentionally, the ITR utility also levied the late fees on the partners of the partnership firms. In order to rectify the error, the Income tax department decided to remove the penalty charged u/s 234F. The reversal of this late fee charged u/s 23F will be considered in the calculation of the refund due, as the case may be, on account of processing of the ITR.

For the fiscal year 2018-19 (i.e. the assessment year of 2019-20), the deadline to file ITR for all the working partner of the firms whose accounts are required to be audited  was September 30, 2019, which was later extended to October 31. The last date was extended to November 30 for tax filers in Jammu & Kashmir and Ladakh.

For other tax filers the last date was July 31, which was further extended to August 31.

Written By: PolicyBazaar - Updated: 18 November 2020
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