What If You Cannot File Your ITR by 31st December 2021


The due date to file the Income Tax Return for the FY 2020-2021 has arrived. The deadline for ITR filing for AY 2021-2022 for all individual taxpayers who do not require tax audit is 31st December 2021. As of now, all such individual taxpayers must file their ITR for FY 2020-21 by 31st December 2021.

There can be serious consequences of not filing your Income Tax Returns by 31st December 2021 for the AY 2021-2022. Here we shall discuss the impact of late ITR filing.

Consequences of not filing Income Tax Return till 31st December

In case you fail to file your Income Tax Returns latest by 31st December 2021, you will still be able to do file them by 31st March 2022. However, you won’t be able to carry forward any of your losses for the current year, which can’t be set off against your current year’s income.

Thus, in case you are incurring losses in the FY 2020-2021 under the head business income, or capital losses above Rs 2 lakhs under the house property head:

  • If you file Income Tax Returns by 31st December 2021, you can carry forward those losses in subsequent years.
  • However, if you fail to file Income Tax Returns by 31st December 2021, you will not be able to carry forward your losses.

No Refund of Excess Tax Paid

Moreover, in case you have paid excess tax, which is more than your tax liability, you are entitled to get a refund of the excess taxes paid.

  • However, if you do not file Income Tax Returns by 31st December 2021, you will lose your right to get interest on such excess tax paid for the period of delay.
  • In addition, if you have paid the taxes lower than your aggregate tax liability, along with the interest for such shortfall, you will have to pay the interest for the period of delay of ITR filing. This is regardless of whether you have already paid the shortfall of taxes after 31st March 2021.

Late Fees for Delay in Income Tax Returns filing

Additionally, you will be subject to payment of a late fee of Rs 5,000/- for late filing of your Income Tax Returns, if your taxable income is above Rs 5 lakhs.

  • If your taxable income is below Rs 5 lakhs, the late fee shall be Rs 1,000/-.
  • Besides, if you are required to submit nil ITR, you will have to pay a late fee of be Rs 1,000/-. This will happen if your gross total income is in the tax slab of Rs 0 to 5 lakh, where no tax is payable due to rebate claimed u/s 87A.

This may also happen if you own any assets outside India or are a signatory to any foreign account.

What if I fail to submit ITR even by the last date?

If you fail to submit your Income Tax Return even by the extended due date i.e. 31st March 2022:

  • You will be subject to payment of a minimum penalty equal up to 50% of the tax liability.
  • Besides, a tax notice will be served to you for payment of all the income tax and the interest liability till the date of your ITR filing.

Hence, to avoid these heavy penalties and other consequences listed above, it is advisable that you file your Income Tax Return before 31st December 2021.

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