Consequences of Belated Return [Sec 139(4)]

Written by Ravi Sankar Robbi

Published on:

Introduction

Filing a Belated Return is always a better option when you missed filing the Original Return (which is filed within the due date). But filing a belated return will lead to certain consequences.

In this article, let’s understand the disadvantages of filing a Belated Return under sec 139(4).

What is a Belated Return

A belated Return is an Income Tax Return (ITR) filed after the due date, nothing but if you missed ITR filing before the due date then you can file the Belated Return before the 31st Decemeber of the relevant assessment year.

As per sec 139(1) of the Income Tax Act, the due date specified for individual taxpayers (who are not covered under tax audit) is 31st July of the relevant assessment year.

Accordingly, for FY 22-23 (AY 23-24) due date for filing ITR is 31st July 2023. Any return filed after this due date will be considered a Belated Return. You can file a belated return, any time before 31st December 2023.

Disadvantages of Belated Return

Following are the disadvantages or Consequences of a Belated Return:

  1. Interest u/s 234A

It will attract an interest of 1% per month till the date of filing

2. Late fee u/s 234F

A late filing fee of Rs. 5,000 shall be levied if total income is more than Rs. 5 lakh. In case, taxable income does not exceed Rs. 5 lakh, then the late fee would be Rs. 1,000 only. Taxpayers whose taxable income is below the basic exemption limit, NO late fee.

3. Losses other than house property loss cannot be carried forward

If you have any loss from business or capital gains losses, it is always better to file your ITR before the due date to avail the benefit of carry forward of losses. If you file ITR after the due date, these losses cannot be carry forwarded.

The only exception is, loss from house property can be carried forward even after the due date also.

4. Certain exemptions and deductions cannot be claimed

Exemptions under sec 10A & 10B and deductions under 80IA, 80IAB, 80IAC, 80JJA, 80JJAA & 80P etc. cannot be claiemd.

5. Lower interest on Refund

In case you are eligible for a refund, interest on such a refund will be lower as the interest will be calculated from the date of actual filing of ITR.

Instead, if you file ITR within the due date interest will be calculated from the 1st day of the relevant assessment year.

6. Refund will come down

Since interest 234A & late fee 234F will be imposed, the refund amount will come down.

7. No ITR – NO Refund

If you are eligible for a refund, without filing an ITR refund cannot be processed.

Conclusion

Since these many consequences are there, it is always better to file ITR on time. In case you missed filing before the due date, then the belated return is a lifesaver for you otherwise you cannot file ITR for that particular financial year.

Hope you enjoyed the article, thank you for your time.

Author is a Qualified CMA with an experience of more than 8 years in the industry. He is also an All India Rank holder in both Inter (AIR-26) & Final (AIR-46) examinations of ICAI. He loves to writes articles on Income Tax & GST.

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