This year however the government has raised the penalty amount for missing the deadline, by imposing a fine up to Rs.10,000 which was Rs.5,000 imposed last year. The practise of charging late filing fees under section 234F was introduced in the Budget of 2017 and became effective for financial year 2017-18 or assessment year 2018-19 onward. The late fee is only applicable if the taxpayer’s net total income, i.e. income after claiming eligible deductions and tax exemptions, exceeds Rs 500,000 in the current financial year. Individuals with taxable income up to Rs 500,000 will have to pay a fine of Rs 1,000 if they file their ITR after December 31. For individuals whose taxable income is more than Rs 500,000, the same penalty will go up to Rs 10,000.
There are however, exemptions to the above rule due to the amendments made in the Income-tax Act, 1961, via Budget 2019 which stipulates the following categories of people will not be exempted from the penalty
1. Individuals who have deposited an amount or aggregates of the amount exceeding Rs.1 crore in one or more banking accounts
2. Individuals who have incurred expenditures exceeding Rs 2 lakh due to foreign travel.
3. Individuals who incur expenditure or aggregate expenditures of Rs 1 lakh and more due to electricity consumption.
Filing ITR dues also guarantees that the interest payable on the tax refund is calculated from April 1 of the relevant assessment year. In case of belated filings the individual loses out on some amount of the interest.