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Tax filing is an important aspect of one’s financial life. If an individual misses the annual income tax return (ITR) filing deadline, they will have to pay an additional penalty at the time of filing a belated ITR. However, certain people have a leverage around this rule. Some individuals can file their ITR without paying a penalty even after missing the deadline. According to the Indian tax laws, everyone isn’t required to pay penalty fees for filing ITR after the expiry of the deadline. If your gross total income does not exceed the basic exemption limit, you won’t be liable to pay a penalty for late filing.

“The late filing fee under Section 234F is charged when a person fails to furnish a return of income by the prescribed due date. This fee depends on the quantum of income and the date of filing of return of income. In general, the late-filing fee under Section 234F is Rs 5,000, however, where the total income of a person does not exceed Rs 5 lakhs, the fee payable is Rs 1,000,” said Tarun Kumar, chartered accountant and direct tax leader at Coherent Advisors.

This year the due date of filing return of income has been extended to December 31 from July 31 for personal taxpayers. Thus, this fee is leviable only if the person files the return of income after December 31. Further, this fee is leviable only if the person is mandatorily required to file the return of income. This means the late fee is not leviable if the person files the income tax return voluntarily.

“The filing of Income-tax return by personal taxpayers is not mandatory if his total income before deductions under Chapter VI-A or exemptions under Section 54 to 54GB (except Section 54EE) is below maximum exemption limit. Hence, if such taxpayer’s voluntary files a return of income, no late fee shall be levied,” Kumar explained.

However, he added, “In certain cases, even if income is below the exemption limit, the filing of return is mandatory like if the taxpayer has overseas assets, he deposited more than Rs 1 crore in bank account, his foreign travel expense is more than Rs 2 lakh or electricity consumption is more than Rs 1 lakh. In such cases, the late fee shall be leviable if there is a delay in the filing of return of income.”

Deadline extended

The CBDT has extended the due date for filing of ITR, but no relief has been provided from the interest chargeable under section 234A if the tax liability of a person exceeds Rs. 1 lakh. The interest under Section 234A is levied if Income-tax return is furnished after the due date or is not furnished.

“If the self-assessment tax liability of a taxpayer exceeds Rs 1 lakh, he would be liable to pay interest under section 234A at the rate of 1% from the expiry of the original due date i.e. 31-07-2021 till the date of filing of return of Income. Thus, taxpayers should pay their taxes even if they are waiting to submit the income-tax return because of the glitches at new portal,” Kumar concluded.