Filing your Income Tax Return (ITR) after the due date can lead to several consequences under the Income Tax Act, 1961. It’s essential to be aware of these implications to avoid unnecessary penalties and interest charges.

1. Interest on Outstanding Tax – Section 234A

If there’s any unpaid tax after the due date, interest is levied at 1% per month or part thereof on the outstanding amount. This interest accrues from the day immediately following the due date until the actual filing date or full payment of tax, whichever is earlier.

Example:

• Outstanding Tax: ₹10,000
• Delay in Filing: 3 months
• Interest: ₹10,000 × 1% × 3 = ₹300

1. Late Filing Fee – Section 234F

A late filing fee is imposed based on the date of filing and total income:

• Filing after the due date but before December 31:
  • Income up to ₹5,00,000: Late fee of ₹1,000
  • Income above ₹5,00,000: Late fee of ₹5,000
• Filing after December 31:
  • Income up to ₹5,00,000: Late fee of ₹1,000
  • Income above ₹5,00,000: Late fee of ₹10,000

Note: No late filing fee is applicable if the total income does not exceed ₹2,50,000.

1. Loss of Certain Benefits

• Carry Forward of Losses: Losses under the heads “Capital Gains” and “Profits and Gains of Business or Profession” cannot be carried forward to subsequent years if the ITR is filed late.
• Interest on Refunds: Delayed filing may result in reduced or no interest on refunds due, as interest is calculated from the date of filing the return.

1. Prosecution and Penalty for Concealment

In cases where the taxpayer willfully fails to file the return, the Income Tax Department may initiate prosecution, leading to penalties and possible imprisonment, depending on the amount of tax evaded.

Recent Changes Post Budget 2025

The Budget 2025 introduced provisions for filing Updated Returns to encourage voluntary compliance:

• Extended Timeframe: Taxpayers can now file updated returns within 48 months from the end of the relevant assessment year.
• Additional Tax Liability: Filing an updated return attracts an additional tax on the unpaid liability:
  • Within 12 months: Additional tax of 25% on the due tax and interest.
  • Beyond 12 months but up to 24 months: Additional tax of 50% on the due tax and interest.
  • Beyond 24 months but up to 36 months: Additional tax of 60% on the due tax and interest.
  • Beyond 36 months but up to 48 months: Additional tax of 70% on the due tax and interest.

Read:What are the due dates for filing Income Tax Returns?

What is the penalty If I fail to furnish my Income Tax return within the due date?

Can an Income Tax return be filed after the due date?

Defective Return Under Income Tax Act (Section 139(9))

A Defective Return refers to an income tax return (ITR) that is incomplete or incorrect due to missing or improper information. Under Section 139(9) of the Income Tax Act, if a return is found defective, the taxpayer is given an opportunity to correct and resubmit it.

📌 When is a Return Considered Defective?

A return is treated as defective if it has any of the following errors or omissions:

1️⃣ Mandatory Details Missing

• Personal details such as Name, PAN, or Address are incomplete or incorrect.
• Bank account details are missing or invalid.

2️⃣ Incomplete or Inconsistent Information

• Balance sheet or profit & loss account details missing in cases where audit is applicable.
• Income details and TDS/TCS claims do not match with Form 26AS.

3️⃣ Tax Computation & Payment Issues

• Taxes due are not paid fully before filing the return.
• Self-assessment tax (SAT) or advance tax is not deposited.

4️⃣ Incorrect ITR Form Used

• Filing an incorrect ITR form based on the income source.

5️⃣ Missing Attachments (For Audit Cases)

• If the taxpayer is required to maintain books of accounts but fails to attach the details.
• Failure to submit the audit report under Section 44AB when applicable.

📢 What Happens If a Return is Defective?

If the Income Tax Department detects a defective return, they issue a Notice under Section 139(9), giving the taxpayer 15 days to rectify and resubmit the correct return.

🚀 If the defect is not rectified within the given time, the return may be treated as invalid, and the taxpayer may face penalties or further notices.

To avoid a defective return, always ensure that the ITR form is properly filled, taxes are paid, and supporting documents are submitted where required.

Is Aadhaar Number Mandatory Under the Income Tax Act?

Yes, quoting the Aadhaar number is mandatory in various cases under the Income Tax Act, 1961. The government has linked Aadhaar with PAN to prevent tax evasion and duplicate PANs.

📌 Key Provisions Related to Aadhaar Under Income Tax Act

1️⃣ Mandatory Quoting of Aadhaar (Section 139AA)

• As per Section 139AA, quoting Aadhaar number or Aadhaar Enrolment ID is mandatory while:
  • Filing Income Tax Returns (ITR)
  • Applying for a new PAN

2️⃣ Linking PAN with Aadhaar

• As per CBDT notification, PAN will become inoperative if not linked with Aadhaar within the prescribed deadline.
• To check or link, visit the Income Tax e-filing portal.

3️⃣ TDS and TCS Applicability (Section 206AA & 206CC)

• If a taxpayer does not provide PAN or Aadhaar, TDS/TCS is deducted at a higher rate of 20% under Section 206AA & 206CC.

4️⃣ Aadhaar for Verification & e-KYC

• Aadhaar is required for e-verification of ITR and e-KYC of financial transactions like opening bank accounts, investing in securities, etc.

5️⃣ Filing ITR Without Aadhaar

• If an individual does not have an Aadhaar number, they must quote the Aadhaar Enrolment ID while filing their return.

6️⃣ Penalty for Non-Linking

• If PAN becomes inoperative due to non-linking with Aadhaar, transactions requiring PAN (e.g., bank accounts, Demat, property sales) may get restricted.

📢 Final Thoughts

Aadhaar is mandatory for filing ITR, linking with PAN, and certain tax-related transactions. Ensure your PAN is linked to Aadhaar to avoid penalties and non-compliance issues. 🚀

Summary Assessment Under Income Tax Act – Section 143(1)

Summary Assessment is a computerized assessment of an Income Tax Return (ITR) without any human intervention. It is done under Section 143(1) of the Income Tax Act and is based purely on the details submitted by the taxpayer in the return.

📌 Key Features of Summary Assessment

1️⃣ Automated Processing

• The return is processed electronically using the Centralized Processing Center (CPC).
• No manual verification is done at this stage.

2️⃣ Matching with Departmental Records

• The system automatically compares the ITR details with Form 26AS, AIS, and TDS records.
• Any discrepancies in tax payments, deductions, or income are flagged.

3️⃣ Possible Adjustments
The tax department may make adjustments for:

• Arithmetic errors in tax computation.
• Incorrect tax claims or deductions.
• Mismatches in TDS/TCS or tax credits.

4️⃣ No Scrutiny Involved

• Summary assessment is not a detailed scrutiny.
• If further verification is needed, the department issues a notice under Section 143(2) for scrutiny.

5️⃣ Time Limit for Summary Assessment

• A summary assessment order must be issued within 9 months from the end of the financial year in which the return was filed.

6️⃣ Outcome of Summary Assessment
After processing, the taxpayer receives an Intimation under Section 143(1), which may show:
✅ No changes in tax liability.
✅ Refund due (if excess tax is paid).
✅ Additional tax payable (if tax is underpaid).

📢 Final Thoughts

Summary assessment is a quick, computerized check of tax returns without human intervention. However, if discrepancies exist, taxpayers may receive demand notices, refund approvals, or scrutiny notices for further examination. Always ensure accurate reporting to avoid unnecessary issues! 🚀

Read:What are the time limits of issuing of Notices under Income Tax Act?