The deadline for filing income tax returns (ITR) is approaching, with taxpayers facing significant repercussions for missing it. The last date to file returns for the Financial Year 2025-26 (Assessment Year 2026-27) is July 31, 2026. Tax experts indicate that while returns can still be filed after this date, doing so will come with various implications.

According to Gaurav Makhijani, Tax Head at Makhijani Gera & Associates, taxpayers should aim to submit their returns on time. If the due date is missed, there are various penalties and lost tax benefits that could increase overall tax liability.

Late Filing Fees and Other Financial Implications

One immediate consequence of filing a belated return is incurring a late filing fee as stipulated by the Income-tax Act. Taxpayers with a total income of up to Rs 5 lakh may face a fee of Rs 1,000. Those whose total income exceeds this threshold could be subject to a fee of Rs 5,000.

Furthermore, individuals who report losses from shares or other business activities risk losing the ability to carry these losses forward to future tax periods. Makhijani warns that capital losses and business losses generally cannot be adjusted against future income if returns are submitted late, potentially leading to a higher tax burden in subsequent years.

In addition to late filing fees, any tax still owed will accrue interest under Section 234A. This interest accumulates at a rate of 1 per cent per month or part of a month from the due date until the return is filed, provided that tax remains unpaid.

Impact on Tax Regime Choices and Filing Recommendations

Missing the ITR deadline may also limit a taxpayer’s options regarding their tax regime. For individuals wishing to select the old tax regime, the return must be filed by the due date. Late submissions will confine taxpayers to the new tax regime, eliminating the choice of the older framework.

As the deadline draws near, experts recommend that taxpayers avoid hastily filing their returns. Makhijani emphasizes the importance of carefully reviewing all documents. Taxpayers should ensure all sources of income are accurately reported, details in the Annual Information Statement (AIS), Form 26AS, and Tax Deducted at Source (TDS) certificates are correctly matched, and their bank account information is accurate.

In conclusion, while the opportunity to file a return remains even after the July 31 deadline, the added financial repercussions may make it more burdensome. Timely filing not only helps avoid late fees and penalties but also facilitates smoother processing of refunds and maintains a better compliance record with tax authorities.

Long or Short, get news the way you like. No ads. No redirections. Download Newspin and Stay Alert, The CSR Journal Mobile app, for fast, crisp, clean updates!

App Store –  https://apps.apple.com/in/app/newspin/id6746449540 

Google Play Store – https://play.google.com/store/apps/details?id=com.inventifweb.newspin&pcampaignid=web_share