With the September 15, 2025, deadline for filing your Income Tax Return (ITR) now upon us, the consequences of not filing on time are significant and go beyond a simple penalty. While a one-time extension was granted from the original July 31 deadline, the Income Tax Department has made it clear that no further extensions will be provided.
Thank you for reading this post, don't forget to subscribe!If you miss today’s deadline, here’s what you can expect:
- Late Filing Fee: You can still file a belated return by December 31, 2025, but you will be charged a mandatory late fee under Section 234F. This fee is ₹5,000 for those with an income above ₹5 lakh and ₹1,000 for those with an income of ₹5 lakh or less.
- Interest on Tax Due: If you have any outstanding tax liability, you will face an additional penalty. Under Section 234A, a simple interest of 1% per month will be charged on the unpaid tax amount, starting from September 16, 2025, until the date you file your return.
- Loss of Tax Benefits: A belated return comes with a major restriction: you lose the ability to carry forward most losses to offset against future income. The only exceptions are losses from “Income from House Property” and unabsorbed depreciation.
- No Regime Switch: This is a critical point for salaried and self-employed individuals. Since the new tax regime is the default, the option to switch to the old regime (to claim deductions like HRA, LTA, and Section 80C) is only available if you file on or before the due date. By filing a belated return, you are automatically locked into the new tax regime, which may result in a higher tax burden.
- Delayed Refunds: If you are due a tax refund, expect a delay in its processing. Returns filed on time are prioritized, meaning you will have to wait longer to receive your refund.
- Risk of Increased Scrutiny: Filing late can flag your return for increased scrutiny from the tax department, which could lead to further inquiries and complications.
While the immediate consequence is a financial penalty, the long-term effects on your tax choices and potential for a higher tax liability make it crucial to file on time. A late filing is not just an inconvenience—it’s a costly mistake that can limit your financial options and increase your risk of facing further action.
