Meeting the July 31 ITR Filing Deadline for AY 2023-24 in India- Implications for Businesses ( July 21, 2023 )

Timely filing and verification of income tax returns (ITR) by the July 31 deadline is necessary for businesses in India to effectively navigate the tax system and avoid penalties and loss of tax benefits.

Navigating the Indian tax landscape effectively is essential for businesses, and timely filing and verification of income tax returns (ITR) play a crucial role in this process.

Meeting the deadline for filing ITRs is of utmost importance, as the government has chosen not to extend the deadline beyond July 31, 2023, for financial year (FY) 2022-23 (Assessment Year (AY) 2023-24).

Businesses need to be well-informed about the implications of late filing to effectively navigate the Indian tax landscape.

Financial implications of missing the July 31 ITR deadline in India

Late filing of ITR can result in the following financial implications, which businesses should be aware of:

• Late filing fee: It is crucial to file the ITR within the specified deadline to avoid penalties and ensure the validity of the return. For FY 2022-23, the deadline is July 31, 2023. Missing this deadline could result in a late filing fee of INR 5,000 (or INR 1,000 for taxpayers with total income up to INR 0.5 million) along with interest on any unpaid tax amount.
• Loss of benefits: Late or non-filing of the ITR can result in the forfeiture of specific deductions and the inability to carry forward losses, with the exception of losses from house property. This could have a notable impact on businesses’ tax planning and overall financial management.
• Penalties for tax evasion: Late or non-filing of ITR may be perceived as an attempt to evade taxes, exposing businesses to severe penalties under section 270A. The penalty amount can be as high as 50 percent of the avoided tax amount, and authorities may initiate prosecution under section 276CC, potentially leading to imprisonment and fines.
• Filing a belated return: While filing a belated return is an option after the deadline, investors must be aware of the financial implications like late filing fees, interest on unpaid tax, and loss of certain benefits.