What to do if you forgot to file your Income Tax Return?

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What to do if you forgot to file your Income Tax Return? title=

An income tax return is a summarized record that contains information about your earnings for a fiscal year. You are required to pay your tax liability and file your returns with the income tax department yearly. The income tax department has set different tax rates for various income slabs; it also systematically gives individuals reminders to file their income tax returns. If you fail to pay your liabilities or file your tax returns, they can lead to hefty fines and penalties. Therefore, one should ensure that they file their returns on time every year to prevent such nuisances. 

Now let us have a look at everything you need to know about filing your returns and what happens when you don’t.

As per the provisions, the Income-tax return is required to be filed where the gross total income of an individual is more than Rs 2 50,000. Every Indian citizen whose gross total income surpasses the taxable limit in a financial year must file an income tax return (ITR). People may fall under different income tax slabs, depending on their income.

But due to basic human nature, you may forget to file these; the income tax department gives recurrent reminders.

Table of content-

When does one have to Mandatory file their Income Tax Return?

In any of the following situations (as per the Income Tax Act), one must file an Income Tax Return in India.

  • Gross total income (without allowing any deductions under section 80C to 80U) exceeds Rs 2.5 lakhs in FY 2018-19. This limit is Rs 3 lakh for senior citizens (aged above 60 but less than 80) or Rs 5 lakhs for super senior citizens (aged above 80).
  • If you are a Company or a Firm having Income or losses.
  • You desire to claim an income tax refund.
  • You wish to carry forward a loss under any head of income.
  • Return filing is also mandatory if you are a Resident individual and have an asset or financial interest in an entity located outside of India.
  • If you are a Resident and a signing authority in a foreign account.
  • You are required to file an income tax return when you are in receipt of income received from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust.
  • If you are a foreign company seeking treaty benefit on a transaction in India
  • Proof of return filing may also be required when applying for a loan or a visa.

However, if you fail to file your returns within the deadlines, you will be liable to pay fines and penalties.

Income tax returns have a designated format, and we are required to disclose the income earned in a financial year. We have to pay the taxes calculated based on this income to the income tax department by the end of the financial year. There is a minimum slab, and individuals who surpass this threshold must file income tax returns mandatorily. Although people can file their income tax returns after the due date, specific outcomes are connected. As per Section 139(4) of the Income Tax Act, individuals can file belated returns later if they miss their deadlines.

Issues that arise when you fail to file your Income Tax Returns

Let us now analyze the consequences of not filing your income tax returns.

  • Penalty- There exists a three-tier fee system for people who do not file their income tax returns before the due date. If somebody files their income tax return after the due date but before 31 December, they have to pay a fine of ₹5000 in addition to their tax liability. In other circumstances, such as when the filing of the income tax return happens on or after 1 January, the fine amount is ₹10000. However, if taxpayers’ income tax return falls below rupees five lakhs, the fee payable is ₹1000 that can be stated as the minimum fee.
  • Revised Income Tax Return- If any error is committed by you while filling your income tax return, you can file a revised return to rectify such mistakes. Previously, taxpayers could file a revised tax return within two years of committing the error. However, the government has decreased that time frame to one year. So, the earlier you file your income tax returns, the more time you have to revise the returns if required.
  • Levy of Interest- The government levies an interest rate of 1% per month as a penalty if you didn’t file your ITR on time. The interest rate calculation includes the month in which the taxpayer finally makes the payment. Such interest obligations are payable after deducting the tax at source, collecting tax at source, advance tax, and other tax credits available under the Income Tax Act.
  • Carry Forward of Losses- If you fail to file your ITR on tor before the due date, then you cannot carry forward any losses, including “profits and gains of business or profession” or “capital gains.”

What if there is a delay in the return of income?

Once the return is filed and the process is duly completed, the central processing center in Bangalore, the Income Tax Department, processes the income tax return. 

Only then that the tax liability or refund of the taxpayer is defined, thus, if the taxpayer is claiming a refund, the delayed filing of the income tax return will result in a delayed receipt of the tax refund. 

Thus, every taxpayer should file an income tax return on time to avoid inevitable consequences, including the levy of a mandatory fee.

Still, you may set off unabsorbed depreciation under the category of “income from house property.”

There are various other difficulties you may face because of a delay in filing income tax returns. These problems do not directly affect your tax liability but can still create problems in other ways, 

Let us discuss some of those scenarios;

Scenarios that may occur due to non-filing of Income Tax Return

  • Since banks examine tax returns from the last three years when you apply for a loan, you might face issues obtaining credit/loan if you fail to file your returns.
  • The income tax authorities manage to scrutinize accounts that file late returns compared to those that submit them on time. As authorities can investigate returns even after five years, you might not have the required supporting documents to submit as proof then, leading to many other compliances and complications.

As you can see, there are various disadvantages due to a delayed filing of income tax returns. Therefore, taxpayers need to file their returns on time to avoid such troubles and delays. 


From the above paragraph, we can determine if you file your ITR after the due date, then a late filing fee will be levied under section 234F. Although, till assessment year (AY) 2017-18, there was no penalty for filing belated income tax returns. This penalty became applicable from AY 2018-19 with the insertion of a new section 234F in the Income Tax Act 1961.Also, various other issues may arise by the non-filing of returns which are discussed above.If you are unsure about few figures in your return, you can file it within the due time and later revise it under section 139(5).

For timely and hassle free return filing contact Legal window or write us at admin@legalwindow.in

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