Govt estimated to have earned up to Rs 627 crore from late ITR filing fee till now

The deadline to file income tax returns (ITR) for the financial year 2023-24 (assessment year 2024-25) for individuals not requiring a tax audit was July 31, 2024. If you missed this deadline, you still have the option to file a belated ITR by paying a penalty. According to the Income Tax Department, over 7.28 crore ITRs were filed by the July 31 deadline.

By August 22, 2024, the number of ITRs filed had increased to around 7.4 crore, which means that more than 13.94 lakh ITRs were filed between August 1 and August 22, 2024. Most of these are likely belated ITRs from individuals who missed the July 31 deadline. Since no other major deadlines for past years fell in this period, it is reasonable to assume that these are primarily belated filings for FY 2023-24.

Late Filing Penalties and Deadlines

If you missed the July 31 deadline, you can still file your ITR until December 31, 2024, but you will need to pay a late filing fee:

• Late Filing Fee: A penalty of up to Rs 5,000 is charged for filing a belated ITR after the due date.
• Reduced Penalty for Small Taxpayers: If your taxable income is up to Rs 5 lakh, the late filing fee is reduced to Rs 1,000.
• No Penalty: If your total income does not exceed the basic exemption limit, no late filing fee is charged.

How Much Revenue Has the Government Earned From Late Filing Fees?

With 13.94 lakh ITRs filed between August 1 and August 22, it’s clear the government has collected a substantial amount in late filing fees. However, the exact revenue depends on how many filers paid the maximum penalty of Rs 5,000 versus a reduced or no penalty.

Here are some estimated scenarios based on different assumptions about the percentage of taxpayers paying the maximum fee:

1. Scenario 1: If 10% of these taxpayers paid no penalty or a reduced penalty, then 90% paid the Rs 5,000 fee. The government would earn approximately Rs 627 crore.
2. Scenario 2: If 20% of taxpayers paid no penalty or a reduced penalty, then 80% paid the Rs 5,000 fee. The government would earn around Rs 557 crore.
3. Scenario 3: If 30% of taxpayers paid no penalty or a reduced penalty, then 70% paid the Rs 5,000 fee. The estimated revenue would be Rs 488 crore.
4. Scenario 4: If 40% of taxpayers paid no penalty or a reduced penalty, then 60% paid the Rs 5,000 fee. The estimated revenue would be Rs 418 crore.
5. Scenario 5: If 50% of taxpayers paid no penalty or a reduced penalty, then 50% paid the Rs 5,000 fee. The estimated revenue would be Rs 348 crore.

Conclusion

If you missed the July 31 deadline, you still have time to file a belated ITR until December 31, 2024. While penalties may apply, filing late is better than not filing at all, as failing to file can lead to further fines and potential legal issues. As the number of late filers increases, so does the revenue collected by the government from these penalties. This serves as a reminder to be timely with tax filings to avoid unnecessary fees and stress.