IT Returns for Financial Year 21-22: Deadline and Penalty for Late Filing

The Central Board of Direct Taxes (CBDT) has released a notification which states that the time limit for verifying income tax returns has been changed from the previous period of 120 days to 30 days.

In the notification released on July 29, 2022 by CBDT, it has been mentioned that these new rules regarding ITR verification will be enforced from August 1, 2022:

  • The last date for filing ITR for financial year 2021-22 is July 31, 2022. For individuals who have filed for ITRs before July 31, 2022, the time limit for verification continues to be 120 days.
  • If an individual completes ITR verification after 30 days, then the date of submission shall be treated as the date of furnishing the return of income. In such a case, all the penalties for late return will be applicable.

Till financial year (FY) 2019-2020, the maximum penalty for missing ITR deadline was Rs 10,000. Since FY 2020-2021, the maximum penalty amount has been reduced by half to Rs 5,000. If the total income of the person is less than 5 lakhs, then the maximum amount payable will be Rs 1,000.

After December 31 of the assessment year, one cannot file for ITR voluntarily. The income tax department will pick up the income and tax details available and provide instructions about what need to be done.

In Budget 2021, the government reduced the maximum time allowed to file ITR was reduced by three months. Consequently, an amendment was made in Section 234F of Income Tax Act, 1961 under which the maximum penalty amount was reduced to a maximum of Rs 5,000.

If ITR is filed before July 31, 2022, and verification is missed, then an application for condonation of delay can be sent to the tax department. If the condonation is accepted, then ITR can be verified.

In case of rejection, the ITR will be considered as not filed and belated ITR would have to be filed. A late fee of Rs 5,000 will also have to be paid, post which only 30 days will be available for verification.

If the deadline of July 31, 2022 is missed for FY 2021-22, then the late fees will be automatically applicable. Even if the verification time limit for 30 days is missed, no additional late fees will be applicable.

If ITR is being filed for an account which has to be audited, then the deadline for filing ITR for FY 2021-22 is September 30, 2022. If not verified within 30 days, then the filing of ITR is taken as the day when verification is completed. In such a case, the late fees for filing late ITR will be applicable.

Income Tax department had been sending taxpayers constant reminders in the month of July to file their income tax returns and not wait for the last date through various platforms like SMS, e-mail, social media, etc.

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