Understanding penalties and exemptions for late ITR filing in 2024 | Fusion - WeRIndia

As the Income Tax Return (ITR) filing deadline approaches, taxpayers should be aware of the consequences of late filing, as well as the exemptions available.

While you can file a belated ITR by December 31, 2024, it comes with penalties and interest on any unpaid taxes.

However, there are specific scenarios where you can avoid penalties, even if you miss the July 31 deadline.

One key exemption applies to individuals whose entire income is exempt from taxation and who have no other taxable income.

These taxpayers can file their ITR after the deadline without facing any penalties. However, this benefit is not extended to those with income from other sources.

Additionally, taxpayers who are not legally required to file an ITR but choose to do so voluntarily are also exempt from late filing penalties.

It’s important to note that certain taxpayers must file their ITR regardless of their income level.

These include individuals with cumulative savings bank deposits exceeding ₹50 lahks in a year, those with an annual sales turnover over ₹60 lahks, professionals earning more than ₹10 lakh annually, and individuals paying electricity bills exceeding ₹1 lakh in a financial year.

Other mandatory filers include those with TCS/TDS exceeding ₹25,000 (₹50,000 for senior citizens), individuals with foreign assets or those who are beneficiaries of such assets, and those who spend over ₹2 lakh on foreign travel or are authorized signatories for accounts managed outside India.

Under Section 234F, individuals required to file an ITR under Section 139 and who fail to do so by the July 31 deadline will incur late filing fees. However, those not legally required to file an ITR will not be subject to these penalties.

Additionally, individuals whose sole income source is agriculture are exempt from late filing penalties.

For individuals and businesses subject to income tax audits, the ITR filing deadline is October 31, 2024.

Filing a belated ITR becomes necessary only if you were required to file an ITR but missed the original deadline.

Those filing ITR 1 or ITR 2 have the option to choose the old tax regime without filing Form 10-IEA, provided they submit their ITR before the deadline.

While late ITR filing can lead to penalties, understanding the exemptions can help taxpayers avoid unnecessary charges.

Being aware of these rules ensures that you comply with tax obligations while minimizing potential penalties.

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