If you have not filed your income tax return for Assessment Year 2024-25 (Fiscal Year 2023-24), you have until  December 31 to do so. Non-filing by eligible Income Tax Assessees  may result in serious consequences,  including a  jail term.

Any eligible assessee has at least two options to file the income tax return, one by the due date and another post-due date on or before December 31, but with the belated fee. However, if an assessee forgets to add any income in the filed income tax return, they  can file an updated return with some payout within 2 years from the end of the relevant Assessment Year.

For example, the due date of filing Ay 2024-25 ITR for an individual (whose books of accounts are not required to be audited) was July 31, 2024, but she/he can file a belated ITR with a penalty between ₹1,000-5,000 by December 31. However, if your gross income is less than the basic exemption limit, you will not be required to pay any penalty. Also, an updated return can be filed till March 31, 2027. Anyone with an income of more than Rs 2.5 lakh (under the old tax regime) or ₹3 lakh (under the new tax regime) must  file in ITR.

In case one is filing the belated return (on or before December 31 and after the due date), they will not be able to carry forward and set off these losses against future profits.  Although, you can carry forward the losses relating to house property. Then, if tax is due on April 1, then an interest of 1 per cent per month on the outstanding tax amount will be levied. This interest is calculated from the date of filling return for the relevant financial year till the due date.

TDS rates for non-filers

There will be higher rate of TDS (Tax Deducted on Source) and TCS (Tax Collected at Source) for non-filer recipient. Rate in such a situation would be 2 times the rate given in the Income Tax Act or Finance Act or 5 per cent, provided the non filer recipient has the PAN. In case PAN is not provided by such a recipient, then the rate would be 20 per cent or a much higher rate.

Under section 276 CCC of the Income Tax, prosecution could be launched for failing to file ITR. If an eligible assessee fails to furnish ITR and the income tax liability is more than ₹25,000, then they will be punishable with rigorous imprisonment of a minimum of 6 months up to 7 years and with a fine. In any other case ( i.e. tax liability is less than ₹25,000) she/he will be punished  with rigorous imprisonment of a minimum of 3 months up to 2 years and a fine.

According to the Income Tax Department,  the target for adding new filers is fixed at 10 per cent for current fiscal year compared to the filer base at the end of the year 2023-24). It may be noted that more than 10 per cent new filers were added in 2020-21, 8 per cent achieved in FY 2021-22, 9.3 per cent achieved in 2022-23 and 11.9 per cent achieved in FY 2023-24.