31^st July 2022 was the deadline to file the Income Tax Return (ITR) for the assessment year ending 2023. The government has made it clear that no extension will be given for filing the ITR, as of now. According to official statistics of the Income Tax (IT) department, more than 5.8 crore returns were filed until the deadline.

But what happens if you miss the deadline? Are there are any remedies? If yes, what is the process for the same? Fortunately, there are mechanisms that can come to your aid in case of a delayed return, subject to certain penalties and interests.
 

What is ITR?

Essentially, it is a form that is submitted to the IT Department containing information about the person’s income and the taxable amount on that income for the financial year (1 Apr – 31 Mar). This includes income of multiple forms, such as:

• Income from salary
• Profits/gains from any business/profession
• Income from house property, for example: rent received
• Income from capital gains
• Income from sources, such as dividend, interest on deposits, royalty, winning lotteries, etc.

 

Various ITR Forms

There are 7 types of ITR forms with the IT Department: ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, ITR-7. The applicability of each form depends on the nature and amount of the income and the type of taxpayer, such as individuals, corporations, etc.

Some of the most commonly used ITR forms

Particulars	Applicability
ITR-1	Filed by resident individuals having total income from the following sources: Salary House property Other sources, excluding lotteries and races Agricultural income (up to INR 5,000)
ITR-2	Filed by individuals and Hindu Undivided Families (HUFs) who are not eligible for ITR-1 form and do not have any income from profits / gains from business / profession
ITR-3	Filed by individuals and HUFs with income from profits / gains from business / profession
ITR-4	Filed by resident individuals, HUFs and firms (except LLPs), who are residents with total income up to INR 50 lakhs and have income from business or profession computed u/s 44AD, 44ADA or 44AE

 

Difference between ‘belated’ & ‘updated’ return

The terms ‘belated’ and ‘updated’ ITR may be used interchangeably. However, there is a slight difference between the two:

Belated ITR

• A taxpayer who misses the deadline for submission of ITR is allowed to file a ‘belated’ return at a later stage.
• It is filed after the due date, i.e., after the regular filing deadline has passed.
• Filed voluntarily up to 31^st March of the assessment year (A.Y.).
• Penalties and other charges will be imposed on belated ITR.
• If the 31^st March deadline is also missed, ITR can only be filed in response to a notice from the IT department.

 

Updated ITR

• It is a new concept under the Income Tax Act.
• The aim is to provide voluntary compliance rather than involvement in adjudication/litigation.
• Regardless of whether an ITR has been filed for that particular A.Y. or not, the assessee is entitled to file an ‘updated’ return for that A.Y. within 24 months (may be extended) from the end of the A.Y.
• Allows rectification of errors, omissions or mistakes while filing original ITR.
• Earliest A.Y. for which an updated return can be filed is 2019-20.
• However, an additional tax has to be paid, over and above the normal tax rate.
• An interest and penalty for late fee (wherever applicable) will also be charged.

 

Major points of difference between Belated and Updated ITR

Belated ITR	Updated ITR
Filed by those who missed the original deadline	Filed by those who filed their ITR on or before the deadline
Has to be filed by 31st March of the assessment year (A.Y.)	Has a window of 24 months, which may be extended to 36 months in some cases, from the end of the A.Y. in question

 

Process of filing an ITR after deadline has passed

• Firstly, file an appeal for condonation of delay, if applicable, with the IT commissioner for possible refunds and losses carried forward.
• Fill the ‘ITR-U’ form for updated return and mention reasons for updated return.
• Section 324F of the IT Act imposes a penalty of INR 5,000 for filing a delayed return.
• If total income is less than INR 5 lakhs, work may be completed with a penalty of INR 1,000.
• If total income does not exceed basic exemption limits under the tax regime chosen, penalty will be exempted.
• Even for a delayed ITR filing, the process is the same; one must only be careful of choosing the correct form and A.Y.
• ITR has to be filed by logging into the Income Tax portal  https://eportal.incometax.gov.in/iec/foservices/#/login
• If you are a foreign company operating in India, you can refer to https://www.indialawoffices.com/legal-articles/foreign-companies-and-income-tax-filing-in-india  for filing ITR.

 

e-Verification

• e-Verification of the ITR is mandatory within 30 days of filing.
• To be done by logging into your account on the IT department’s website.
• Penalty will be imposed in case of failure of verification.
• No need for any supporting documents for e-Verification.
• e-Verification can be done at https://eportal.incometax.gov.in/iec/foservices/#/pre-login/eVerifyReturn-bl

 

Conclusion

Filing an ITR return is a legal obligation for every citizen and a right of the Government of India. If one misses the deadline to file ITRs, the government provides sufficient mechanisms to put it right, subject to certain charges. This must be availed by citizens to avoid being targeted by the IT department and getting embroiled in needless litigation with government authorities.

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