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ITR Deadline Missed: Penalties, Interest, and Loss Carry-Forward Rules
Taxpayers who miss the July 31 ITR deadline face late filing fees of ₹1,000-5,000, interest on unpaid dues, and restrictions on carrying forward losses. The belated return window closes Dec 31.
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The July 31 deadline for filing income tax returns arrives today. More than 5 crore returns had been filed through Thursday, the Mint reported. Taxpayers who miss the deadline can still file a belated return by December 31, 2026. The late filing option carries penalties and interest.
The late filing fee ranges from ₹1,000 to ₹5,000, depending on the taxpayer's income. Interest under Section 234A of the Income Tax Act also applies on any outstanding tax dues. The rate is 1% per month, calculated from the due date until the return is filed.
The bigger penalty for many taxpayers is the loss of the ability to carry forward losses. Section 80 of the Act restricts carry-forward of capital losses and business losses for belated filers. Someone who booked a loss on a stock sale this year cannot offset it against future gains if they file late.