Missing ITR verification deadline can cost you Rs 5000 despite filing ITR on time

You are likely to have to pay upto Rs 5,000 penalty if you miss the deadline for verifying your income tax return unless you are filing belated ITR and have to pay the penalty in any case.

The income tax department has reduced the time limit for verifying ITR from 120 days from date of filing ITR previously to 30 days. In a notification issued on July 29, 2022, the Central Board of Direct Taxes (CBDT) stated that this new rule regarding ITR verification will be effective from August 1, 2022. The CBDT notification also stated that the reduced time limit of 30 days is applicable to ITRs filed on or after August 1, 2022; for individuals who have filed ITRs on or before July 31, 2022, the time limit to verify continues to be 120 days.

The latest notification by CBDT also states that if an individual verifies the ITR after 30 days (i.e., the new time limit), then in such cases the date of e-verification/ITR-V submission shall be treated as date of furnishing the return of income. Further, all the consequences of late filing of return under the Income-Tax Act, 1961 will apply including the penal consequences as well.

Here are three situations relating to ITR filing and verification.

Situation 1: If you filed your ITR before the deadline of July 31, 2022 for FY 2021-22 then you have 120 days to verify your return. If you miss this verification deadline you can apply for condonation of the delay to the tax department. If your condonation (of delay) request is accepted, then you can verify your ITR. If condonation request is rejected, then your ITR will be considered as if not filed and you will have to file it again as a belated ITR. A late fee of upto Rs 5000 has to be paid for filing belated ITR for which you would have 30 days for verification as it would have been filed post-July 31, 2022.

Situation 2: If you missed the deadline of July 31 and are filing a belated ITR for FY2021-22, then the late fees will be applicable to you in any case. Although the time limit for verification of this belated ITR will be 30 days you won’t have to pay the late fees again if you miss the verification deadline. This is because you would have already paid the fees for filing of belated ITR.

Situation 3: If you fall in that category of individuals whose accounts have to be audited for filing of ITR, then the deadline for filing ITR for FY 2021-22 is September 30, 2022. In case you do not verify the ITR within 30 days then date of filing of ITR will be taken as the date on which you verify it. Therefore, if the normal deadline (of filing ITR i.e. Sept 30) applicable to you, is past when you verify your ITR then you would have to pay the fees applicable to belated ITR.

Chartered Accountant Ruchika Bhagat, MD of Neeraj Bhagat & Co., a chartered accountants’ firm, says, “In case the deadline for ITR verification (30 days) is missed then the date of filing of tax return will be the date when the tax return gets verified (E-verified/physical ITR-V submission). Further, If the date of ITR verification is beyond the due date of filing ITR (usually July 31), then penalty under section 234F i.e., penalty for delay of filing ITR will be charged. The income tax portal may ask the taxpayer to first deposit the late filing fee (maximum up to Rs 5,000) before he/she gets an option to verify his/her ITR, provided the due date of filing ITR has expired.”

Applicability of late fees in case of non-verification of ITR within 30 days. Following table applies only in case of ITRs filed after July 31, 2022.

Time of Verification Date of Tax Return Time Limit u/s 139(1) on date of filing ITR Late Fees u/s 234F
ITR data is uploaded on income tax portal and e-verified/ITR-V submitted within 30 days The date of ITR uploaded shall be considered as the date of filing ITR. Expired Applicable
Not Expired Not Applicable
ITR data is uploaded on income tax portal but e-verified or ITR-V submitted beyond the time-limit of 30 days The date of e-verification/ITR-V submission shall be treated as the date of filing ITR and all consequences of late filing of return (including disallowance of carry forward of losses, etc) may be applicable. Expired Applicable
Not Expired Not Applicable

Source: RSM India

Dr Suresh Surana, founder, RSM India – a tax consulting group says, “In case an individual opts for physical verification of ITR (i.e., by sending ITR-V to CPC, Bengaluru via Post), then the date of dispatch of Speed Post/ordinary post of duly verified ITR-V shall be considered for the purpose of determination of the 30 days period, from the date of transmitting the data of Income-tax return electronically.”

Can you file condonation request if 30-day ITR verification deadline is missed?

Earlier, if an individual missed the ITR verification deadline of 120 days, he/she had an option to file a condonation request. In a ‘Condonation request’, the taxpayer requests the tax department to permit him/her to verify the ITR and also mentions the reason for failing to verify ITR within the prescribed time limit. If the department is satisfied, then verification of ITR is allowed. With the new amendment, the tax department has said that failing to verify ITR within the 30 days time limit can lead to the consequences of late filing. Therefore, can an individual taxpayer still file a condonation request?

“Condonation request can be filed anytime on online portal by giving reasonable reasons for delay in e-verification, if Income Tax Department is satisfied with the reasons, then condonation will be accepted. If condonation is granted by the department, then late filing penalties will be waived off”, says Bhagat.

If the tax department doesn’t permit you to verify your ITR after the deadline for verification is past then the ITR would be treated as invalid. Chartered Accountant Naveen Wadhwa, DGM, says, “When the previous unverified ITR is treated as an invalid tax return, the taxpayer can file a belated return (provided the due date of filing of original return has expired). Where a return is treated as invalid, the consequences of non-filing of tax return would follow (such as forfeiture of losses, interest under Section 234A/B/C, etc.) even if the taxpayer files a belated return. A taxpayer can apply for the condonation of delay in filing of return of income, and waiver of interest.”

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