Interest, Penalty and Prosecution for missing ITR deadline


Missed the August 5th due date for filing ITR this year?  Well, this might not outrightly land you in Jail but there are certain consequences of not filing your ITR on time.  In this article we discuss the interest, penalty and prosecution implications of not filing your ITR on time.


Interest under section 234A

Let’s understand this with an example.  Assuming you have outstanding tax payable on the date of filing your ITR of Rs 10,000. The due date for filing the ITR was July 31 of the following year but you somehow missed the due date and file your ITR on September 15th.

As per the income tax law, you would be required to pay interest as under:

Outstanding tax liability on the date of filing ITR: Rs 10,000 

Interest rate: 1 % per month (or part of month) 

Interest payable: Rs 200 (Rs 10,000 X 1% per month X 2 months)

[2 months because even part of month is considered as a whole month, hence even 15 days of September will be considered as one whole month]

However, this interest is applicable only if you have outstanding tax payable at the time of filing your belated ITR. That means, in the above example, if your outstanding tax payable on July 31, was Nil, your interest liability under section 234A would also be Nil.



If you fail to file your ITR within the due date, the tax officer can impose a penalty of upto Rs 5,000 on you. But this penalty is at the discretion of the tax officer and is imposed only in very few cases.



The income tax law provides powers to the tax officers to initiate prosecution for not filing of ITRs. Yes, that simply means you can end up in jail if you don’t file your return. But not to worry, as such powers are exercised by the tax officers only in very remote cases.


Have you received a notice from the Income tax department for any of the above? Mytaxreturns with its Expert team can assist you in responding to the above?  Click here to know more.


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