Individuals must file their tax returns by the due date, which for Fiscal Year 2022-23 is July 31, 2023. Failure to file the tax return by the due date of July 31, 2023, will result in financial consequences.
For people whose combined income exceeds Rs 5 lakh, filing late carries a penalty of Rs 5000. Individuals whose combined income is up to this amount are subject to a Rs. 1000 fine.
The assessee may choose to submit updated returns after December 31st, but doing so will result in 25% more tax due up until March 31st 2024 and 50% more tax due until December 31st 2024.
Underreporting income could result in fines of up to 50%, and misreporting income could result in fines of up to 200%. Authorities may begin criminal proceedings if a tax return is not filed despite reminders, and the length of the sentence will depend on the amount of the unpaid tax.
Employees who are paid a salary cannot choose the new tax system, and if they do, late filing will result in additional tax and interest.
It is possible to carry over some losses to subsequent years. If returns are not filed by the deadline, this option is not available. Only house property losses are transferable to subsequent years.
Delay in receiving tax refunds is another potential drawback of late filing. Delays of this nature can lead to unnecessary inconvenience and financial strain.