Have you missed the deadline to file your income tax return (ITR)? If so, you’re not alone, and there is no need to panic.
For many crypto investors in India, the complexities of managing multiple transactions, tracking profits and losses, and navigating the ever-evolving tax landscape can lead to delays.
However, it is still possible to file your income tax return after the due date, but it comes with challenges and an ITR penalty.
To avoid late fees for ITR, this article will guide you through the crucial steps of belated income tax filing, helping you understand the process and avoid unnecessary fines so you can focus on what matters—your investments.
What Is Belated Income Tax Return?
A Belated Return is when you file your Income Tax Return after the 31 July deadline but before 31 December of the assessment year.
You can submit your return without facing harsh penalties if you have missed the original deadline.
Filing a Belated Return can help you avoid more significant issues, like ITR late filing penalty for non-compliance or interest on taxes due.
For the Financial Year 2023-24, the due date to file your ITR was 31 July 2024. If you have missed this deadline, you can still file your return by 31 December 2024 under the Belated Return option.
Although you must pay a late fee for ITR filing after the deadline, it’s a better alternative than not filing. Take advantage of this second chance to stay compliant and avoid further tax complications.
ITR Filing Due Dates
For the Assessment Year 2024-25, the deadline for filing the income tax return under section 139(1) was 31st July 2024, which the government did not extend.
As a crypto investor, you might believe that paying taxes is sufficient, but to your surprise the legal obligations continue for those who do not comply. Therefore, it is well suggested that you complete the ITR filing before the deadline to avoid legal consequences.
Moreover, since the financial year 2017-18, a late fee for ITR filing applies to returns submitted after the due date. Let’s check out the due dates for AY 2024-25.
Sr. No. | Particulars | Due Date |
1 | ITR filing for non-tax audit entities and individuals | 31st July 2024 |
2 | ITR filing for taxpayers covered under the tax audit (other than transfer pricing cases) | 31st Oct 2024 |
3 | ITR filing for taxpayers covered under transfer pricing | 30th Nov 2024 |
4 | Due date for revised return/belated return of income for FY 2023-24 | 31st Dec 2024 |
Penalty For Late Filing Of ITR
If you have missed the deadline to file your Income Tax Return, you will face a penalty under Section 234F. This rule has been in place since the Financial Year 2017-18. The original due date for filing returns for the Financial Year 2023-24 was 31st July 2024.
However, if you didn’t file by this date, you could submit your return by 31st December 2024, but you will need to pay an ITR penalty for late filing.
If you filed your return after 31st July 2024 but before 31st December 2024, the maximum penalty is INR 5,000. This penalty applies to those whose total income exceeds INR 5 lakh.
The penalty was lower for taxpayers whose total income did not exceed INR 5 lakh, with a maximum of INR 1,000.
To Summarise The Penalty For Late Filing Of ITR
Gross Income | Late Filing Fees |
Up to INR 5 Lakhs | INR 1000 |
Above INR 5 Lakhs | INR 5000 |
Advantages Of Filing ITR On Time
Filing your Income Tax Return (ITR) on time offers more than peace of mind; it unlocks a range of benefits that can simplify your financial life. Meeting deadlines enhances your chances of favourable outcomes in various financial and legal matters.
Streamlined Loan Approvals
Filing your ITR on time simplifies the loan application process. Whether you are applying for a vehicle, house, or personal loan, timely ITR filing strengthens your application. Lenders often use your tax returns to assess your financial stability and credibility.
Receive Tax Refund Faster
If you have overpaid taxes, filing your ITR early allows you to claim a tax refund. The sooner you file, the quicker the income tax department processes your return and issues your refund. This can provide you with additional funds when you need them most.
Use ITR as Proof
Your ITR serves as official proof of your income and address. You often need these documents when applying for loans or visas. Having your ITR filed on time ensures you have up-to-date proof ready when required.
Fast Visa Processing
When applying for a visa, embassies and consulates frequently ask for copies of your tax returns from the past few years. Timely filing helps you provide this documentation promptly, speeding up your visa processing.
Carry Forward Losses
Filing your ITR before the deadline allows you to carry forward any losses to future years. You can use these losses to offset future income, potentially reducing your tax liability in the coming years.
Avoid Penalties and Legal Issues
Timely filing helps you avoid penalties and prosecution. Missing the deadline can lead to fines and legal issues. By filing on time, you stay compliant and prevent unnecessary complications with the income tax department.
What Happens If You Don’t File Your ITR on Time?
Apart from paying the penalty for late filing of ITR, there are other disadvantages. Here’s what you might face if you don’t file your ITR on time:
Legal Action
If you willfully avoid filing your return even after receiving notices, the income tax officer can start legal proceedings against you. This prosecution can lead to imprisonment for three months to two years and a fine. The imprisonment period could extend to seven years if you owe substantial tax.
Penalties for Underreporting Income
If you under report your income, the income tax officer can impose a penalty of up to 50% of the tax due. This penalty adds to the financial burden of late filing, making it crucial to file on time to avoid extra costs.
Inability to Set Off Losses
If you don’t file your return on time, you cannot carry forward losses, except for house property losses. This means you miss the opportunity to offset these losses against future gains. Properly filing on time allows you to manage and utilise your losses more effectively.
Interest Charges on Late Filing
You will face interest charges under Section 234A at 1% per month or part thereof on the tax due until you pay it. This interest starts accruing immediately after the due date. For the Financial Year 2023-24, the interest will begin accumulating from 1st August 2024. The longer you delay, the more interest you will owe.
Delayed Refunds
If you are due a refund for excess taxes paid, you must file your return before the due date to receive it promptly. Delayed filing can slow down the refund process, affecting your finances.
Deductions Disallowed
If you delay filing your ITR, you will forfeit certain deductions and exemptions under sections 10A, 10B, 80-IA, 80-IB, 80-IC, 80-ID, and 80-IE. These tax-saving benefits are available only if you file your ITR before the original deadline.
How To File a Belated Income Tax Return?
If you have missed the deadline for ITR filing, here’s how you can file a belated tax return on the ITR website:
Step 1: Log in to your account on the e-filing portal.
Step 2: Click ‘e-File,’ then select ‘Income Tax Returns,’ and choose ‘File Income Tax Return.’
Step 3: Choose the relevant assessment year. For the financial year (FY) 2023-24, the assessment year will be AY 2024-25. Now, under Select Mode of Filing, choose Online and hit Continue.
Step 4: Click “Start New Filing” on the next page.
Step 5: Now choose the applicable status. If you are filing it for yourself, choose “Individual.”
Step 6: Now select the applicable ITR forms. If you are a crypto investor, you must choose between ITR-2 or ITR-3 based on the type of crypto income. For more details, you can refer to our blog here.
Step 7: Press the ‘Personal Information’ section to verify all your details.
Step 8: Scroll to the filing section and select the 139(4) option.
Step 9: Enter all your income details under the appropriate source heads, then make the tax payment.
Step 10: Once you have filed your ITR, you can verify it using the OTP received on your mobile number linked to your Aadhaar.
How Can KoinX Help With Your Crypto Tax Filing?
If you’re a crypto investor who has missed the ITR filing deadline, you might feel overwhelmed by the thought of managing your taxes. The complexities of crypto transactions and tax regulations can make late filing even more stressful.
Here’s how KoinX can help. With its advanced features, KoinX simplifies handling your crypto taxes, ensuring you comply with tax laws and ease the burden of late filing. KoinX offers following features:
Automated Crypto Tax Calculation
KoinX takes the hassle out of tax calculations by automatically computing taxes for all your crypto transactions. You no longer need to track each trade or deal with complex calculations manually. KoinX handles everything for you, ensuring your tax reporting is straightforward and accurate.
Accurate Generation of Schedule VDA
KoinX generates a precise Schedule VDA report, which is crucial for reporting your crypto transactions correctly. This report ensures that all transactions are documented accurately, reducing the risk of errors and omissions in your tax filings.
Easy Integration with Major Exchanges
KoinX integrates with over 280 cryptocurrency exchanges. This feature allows you to import your transaction data effortlessly without manual entry. By keeping your data current and accurate, KoinX streamlines the process and saves you time.
Tax Filing Assistance
With KoinX, you can opt for our bundle plans and receive tax filing assistance from recognised Chartered Accountants (CAs). This option helps you navigate the complexities of crypto tax filing with professional support, ensuring accuracy and compliance.
We understand that crypto taxes can initially seem daunting, but by joining KoinX, you can easily streamline the tax filing process.
Conclusion
Missing the deadline for filing your income tax returns can feel overwhelming, especially when managing crypto investments adds another layer of complexity.
However, taking action now can help you avoid further complications and the ITR late filing penalty. Understanding the rules and options available for belated filings allows you to navigate this situation more effectively.
Frequently Asked Questions
Can I Revise My Belated Return?
Yes, you can revise a belated return. However, you must file the revised or belated return by 31st December of the relevant assessment year. Therefore, you need to complete the revision before 31st December 2024.
Do I Need To File ITR If My Tax Liability Is Nil?
Yes, you must file your ITR if your income exceeds the basic exemption limit or meets other conditions specified under Section 139(1).
Is It Mandatory To Report Crypto In ITR?
Yes, reporting crypto transactions in your ITR in India is mandatory. The Income Tax Department requires you to disclose any gains or losses from cryptocurrency transactions, ensuring compliance with tax regulations and avoiding potential penalties.
Do I Need To E-Verify The Belated Return?
Yes, to complete the return filing process, it is mandatory to e-verify your income tax return. This includes e-verifying any belated return filed under section 139(4).
