Section 234F of Income Tax Act

Section 234F of the Income Tax Act of 1961 states the penalty for late filing of the income tax return. Where a person is required to furnish his ITR but fails to do so within the stipulated time, he shall be liable to pay a sum as a penalty.

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Late Fee Penalty

Section 234F of the Income Tax Act is applicable from 1st April 2018. The assessee is liable for a penalty for late filing of income tax returns. He is required to pay a sum of INR 5,000 if he furnished returns on or before 31st December of the assessment year. The assessee is further directed to pay INR 10,000 in other cases as a late fee for filing income tax returns. 

However, the penalty for late filing of income tax returns is not subject to exceeding INR 1,000 if the total income of the person does not exceed INR 5,00,000. Section 234F is applicable only as a late fee for filing an income tax return concerning filed ITR or income tax return on or from 1st April 2018, which is required to be produced by the assessee for an assessment year.

Scope of Section 234F

Following persons come under the purview of section 234F of the Income Tax Act:

  • Individual (Indian citizen)

  • Company

  • Firm

  • AOP (Association of Persons)

All the aforementioned persons are liable to pay a late filing penalty if the return is not filed within the due date or stipulated time.

Penalty before Section 234F

Earlier, the penalty for late filing of ITR was imposable or livable under section 271F of the Income Tax Act of 1961. 

According to this section, if the assessee failed to file his ITR on or before the due date of the assessment year, the assessing officer can levy a penalty of a sum of INR 5,000. However, the government of India withdrew this section in the assessment year 2018-19 and introduced another section for penalty, i.e., section 234F of Income Tax Act.

Mandatorily Requirement for ITR Filing

To avoid repercussions of section 234F on the Income Tax Act, the taxpayer must file ITR if:

  • Total income of the assessee exceeds the basic exemption limit 

  • Assessee owns assets outside the territory of India

  • Assessee has deposited more than INR 1 crore in his bank account (except if the amount is deposited in the current account of post office and total income exceeds the basic exemption limit)

  • Assessee spends INR 2 lakh or more on international travelling

  • Annual electricity bill of the assessee is more than INR 1 lakh

  • Gross receipt of a professional is more than INR 10 lakh

  • Amount of TDS is more than INR 25,000 during the previous years

  • Business turnover exceeds INR 60 lakh

  • Deposit of the assessee exceeds INR 50 lakh in his savings account

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Challan No. 280

An assessee is required to fill challan no. 280 to pay the penalty for not or late filing of ITR. One must fill in the following details:

  • Fill in the assessment year and select between corporate tax and others

  • Enter PAN or permanent account number in the challan

  • Enter full name and complete residential address

  • State phone number along with STD code

  • In the next step, assessee should tick one of the types of tax from the following:

    • Advance Tax

    • Surtax

    • Self-Assessment Tax

    • Tax on Regular Assessment

    • Tax on Distributed Profits of Domestic Companies

    • Tax on Distributed Income to Unit Holders

  • Fill in payment details

  • Mention accurate date, name of bank and branch, and signature of the person making the payment

  • In the counterfoil head, fill in the details shown in the form, including his PAN, name of bank and branch, assessment year etc.

In Conclusion

The new penalty under section 234 (f) was introduced in the budget in 2017. From 1st April 2018, it became applicable for assessment years. If a person fails to file ITR under section 139 of the Income Tax Act, he shall be liable to pay the penalty.

FAQ's

  • How much penalty amount do I require to pay under section 234f of Income Tax Act for not or late filing my income tax return under section 139?

    The penalty under section 234f of Income Tax Act is as follows:
    • If the annual income of an individual does not exceed the basic exemption limit, he is not required to pay any penalty for late or not filing his income tax return. 
    • If the taxable income of an individual is more than the exemption limit but less than INR 5,00,000, he is required to pay INR 1,000 as a late fee penalty under section 234f of Income Tax Act of 1961.
    • If the total income of a taxpayer or assessee exceeds INR 5, 00,000, then he is obligated to pay INR 5,000 as a late fee penalty.
  • What is meant by payment of interest?

    If a taxpayer fails to file his income tax return within the prescribed or stipulated time, he shall be required to pay the interest on the taxable income every month at the rate of one per cent. The interest shall be computed on the remaining amount which is unpaid by the assessee while filing ITR under section 234A of the Income Tax Act of 1961. 
    The taxpayer must note that he cannot file an ITR unless he pays all the due taxes. Hence, the calculation of the penalty shall take place immediately upon the elapsed due date of the relevant assessment year.
  • Which section levies a penalty for not filing an income tax return?

    Section 234F of Income Tax Act levies penalty for not filing income tax returns.
  • Do I need to pay other fees or penalties except under section 234F of Income Tax Act of 1961?

    An assessee is required to pay interest of one per cent every month till he pays the total taxable amount. The interest is defined under section 234A. Hence, apart from section 234F of the Income Tax Act, the assessee is also subject to bear interest under section 234A.
  • Can a taxpayer carry forward his losses?

    A taxpayer can carry forward his losses or previous year while filing the return on or before the due date.

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