Penalty for Non-Filing or Late-Filing the Income Tax Return
Filing your income tax returns brings with it a lot of benefits. However, late payments result in different kinds of penalties under the various sections of the Income Tax Act.
We have compiled every type of late penalty for not filing ITR applicable under different sections. Keep reading to understand which one applies to you and how you can clear this payment.
What are the section-wise penalties for not filing ITR?
Refer to the following table to know about the different types of charges you might face depending on the conditions of late ITR filing.
| Sections | Nature of Offence | Penalty Levied |
| Section 234F | Filing ITR past the given due date | ₹ 5000 if ITR is reported before 31st December of the Assessment Year, ₹ 10,000 if ITR is reported after 31st December but before 31st March of the Assessment Year. This is for those whose income is above ₹ 5 Lakh. For those with income below this, the penalty is ₹ 1000. |
| Section 234A | A person fails to file ITR within the due date and has an outstanding unpaid tax | Interest on the outstanding tax amount at 1% per month or part of the month since the prescribed due date |
| Section 271H | Failure to file TDS and TCS returns within the given due date | Rs.10,000-Rs.1,00,000, besides the late filing penalty under Section 234E, which is Rs.200/day till the TDS/TCS is paid |
| Section 270A | A person with taxable income fails to file his ITR or is found to under-report his income in the returns | 50% of the total tax payable on the income for which no return was furnished |
What Is the Taxpayer-Wise Penalty for Late or Non-Filing of Income Tax Returns?
Here is a list of the categories of taxpayers and their penalties for not filing income tax returns within the due date.
Salaried Individuals: Here, 3 categories of individuals are considered.
Total annual income below ₹ 2.5 lakhs: No penalty (No ITR penalty for nil return)
Total annual income below ₹ 5 lakhs: Maximum penalty cannot exceed ₹ 1,000
Total annual income above ₹ 5 lakhs: Up to ₹ 10,000
Companies: Up to ₹ 10,000
Self-Employed Individuals: Up to ₹ 10,000
Senior Citizens: The said penalty for not filing ITR under Section 234F is only applicable to senior citizens meeting the following criteria.
Aged between 60-80 years with a total annual income of more than ₹ 3 lakhs.
Aged above 80 years with a total annual income of more than ₹ 5 lakhs.
Now, there are a lot of individuals with gross annual salaries not exceeding the taxable limit. If you are one of them, you might be wondering how a penalty for late ITR filing might affect you. We have the answer for that as well.
Do people with incomes below the taxable limit also need to pay a late ITR penalty?
Generally, the Income Tax department does not levy any penalty of non-filing of ITR upon individuals and organisations with total gross income below the exemption limit. However, the Union Budget 2019 introduced amendments in the Income Tax Act effective from AY 2020-21, which mandates ITR filing for taxpayers meeting the following conditions despite not having a taxable income.
- Those who have made expenditure towards electricity consumption exceeding Rs.1 lakh
- Individuals with expenses over Rs.2 lakhs on foreign travel
- Those who have a total deposit of more than Rs.1 crore in one or multiple current accounts with a bank
- Those who are Indian residents but have income from foreign assets.
If you happen to meet any of these or other conditions included in the latest amendment of the Income Tax Act, you will have to pay the prescribed penalty for non-filing of ITR. As already mentioned, this applies even to those who do not have a taxable gross income.
Now that you know which conditions make you liable to file ITR, you must also know the process to pay the penalty if you haven’t filed your returns within the prescribed due date.
How to pay the ITR penalty?
You can clear your late ITR filing penalty both via online and offline processes. Here is the process to clear your penalty for not filing the income tax return.
Online process
Step 1: Visit the official income tax e-filing portal.
Step 2: On the left column, click on “e-Pay Tax.”
Step 3: You will see a new window displaying the message that you need to be redirected to the NSDL website to continue the payment. Click on “Click here to go to protean (previously NSDL) tax payment page for other banks.”
Step 4: Now, you will be redirected to a new page on the website of NSDL, displaying multiple Challan options under “NON-TDS/TCS.” Click on “Proceed” under “CHALLAN NO./ITNS 280.”
Step 5: The next page will display the form you need to fill up for payment.
Step 6: If you are paying the penalty for not filing ITR as an individual taxpayer, choose “(0021) Income Tax (Other than Companies)” for “Tax Applicable.” Next, select “(300) Self Assessment Tax” under “Type of Payment” and scroll down.
Step 7: Now, choose from the payment modes of “Net Banking” and “Debit Card.” In either case, select the bank from the drop-down menu. Enter your bank account number and pick the correct assessment year.
Step 8: Next, fill in the fields for your address details, email ID, and mobile number. Enter the given security code and hit “Proceed.”
Step 9: The next screen will display your filled-in challan with all entered details. Cross-check to make sure there is no wrong information provided. Then, scroll down and click on “Edit” if you need to change any data. Otherwise, click on “Submit to the Bank.”
Step 10: You will be redirected to the payment page of your selected bank, where you need to sign in using your account details.
Step 11: On the next page, you will need to enter the penalty amount in the boxes corresponding to “Others.” This is because there is no designated box for payment of the ITR penalty after the due date. In case you need to pay outstanding tax along with a fine, enter the amount in the box beside “Tax.” Then, click on “Confirm.”
After completing this process, the Income Tax department will deduct the required fine directly from your provided bank account and issue a receipt. Thus, it ends the online procedure to pay the penalty on late filing of ITR.
Offline process
You can also pay your ITR late fee offline in the following steps.
Step 1: Go to the official website of Income Tax India.
Step 2: Select “Forms/Downloads” from the top menu on the home page. Click on “Challans” from the drop-down menu.
Step 3: On the next page, you will find a list of downloadable challans. Click on any of the options from “PDF” and “Fillable Form” beside “ITNS-280,” depending on your suitability.
Step 4: The downloaded form will look like the image given below.
You can also get this form from your nearest bank branch if you are unable to download it. Fill this form with accurate details. Next, submit the form along with the required penalty amount at the counter of a relevant bank. You can make payment via cash or cheque and collect the receipt.
This challan receipt acts as an acknowledgement of payment and can be used later for challan verification. Not having this document makes you unable to prove that your fine has been paid and can lead to serious consequences later.
Can You Be Imprisoned for Not Filing a Tax Return?
Until now, several conditions explained here were concerning the consequences of not filing ITR on the due date. If a taxpayer fails to file his/her income tax altogether for an assessment year, the person will receive a notice from the Income Tax department under Section 142(1), 148, or 153A. If ITR is not filed even after these measures, the concerned individual might face prosecution under Section 276CC of the Income Tax Act for tax evasion.
The specifics regarding imprisonment are as follows.
- For possible tax evasion exceeding Rs.25 lakhs: Penalty for not filing ITR plus imprisonment of at least 6 months, which can extend to 7 years.
- For other cases: Prescribed penalty plus imprisonment of at least 3 months, extendable up to 2 years.
There you go, with a comprehensive guide on the various penalties for delayed tax return filing. If you have failed to make timely filing this time, make sure to clear the fine. Also, now that you know of all the adverse circumstances, make it a point to file ITR timely for the next AY to avoid such inconveniences.
Frequently Asked Questions
Do taxpayers need to pay the penalty on the late filing of ITR in addition to interest under Section 234A?
Interest under Section 234A is only charged when you have any outstanding tax amount to be paid. Also, you cannot file your income tax returns if you haven’t cleared all taxes in the first place. Therefore, the penalty for late ITR filing does not apply here. Therefore, the consequences of late filing of ITR are much limited here.
Are there any exemptions on late filing of the ITR penalty for senior citizens?
Yes, the Union Budget 2021 exempts senior citizens from filing income tax returns if they meet the following criteria.
- They are aged above 75 years.
- Their only sources of income are pension and interest from fixed deposits.
- Also, the interest must be earned from the same financial institution where a pension is deposited.
- Concerned individuals need to produce a declaration specifying required details to their respective financial institutions.
- The mentioned financial institution should be one of the few notified by the Central Government.
Individuals meeting these criterias do not need to bear the penalty for not filing ITR. However, they still need to pay income tax, which will be deducted from their bank accounts accordingly.
Are there any relaxations for prosecution under Section 276CC for non-filing of ITR?
Yes, assessees meeting the following conditions may not be subject to the proceedings under Section 276CC of the Income Tax Act.
- The taxpayer furnishes ITR before the end of AY.
- Total tax payable by an individual taxpayer on his/her total income apart from TDS and advanced tax does not exceed Rs.10,000.