Penalty U/S 234F (Fees) For Late Filling of ITR

PENALTY U/S 234F (FEES) FOR LATE FILING OF ITR 

Under this section, the fee (penalty) is levied if the Income-tax return is not filed within the due date. It is likely to be increased from 1st April 2018 onward as per Section 234F of the Income Tax Act. Provisions of Section 234F of the Income Tax Act are as follows. 

Applicability of section 234F of the income tax

In pursuance of the section, 234F shall be drawn if the below requirements are met –

1. The assessee is required, in accordance with the provisions of section 139, to file an income tax return;

2. The assessee either did not file or postponed the filing of the said income tax return.

Section 234F: New penalty for late filing of Income Tax Return under section 234F is introduced in Budget 2017. This penalty is applicable for the assessment year commencing from the 1^st Day of April 2018. If a person who is compulsorily required to file Income Tax Return (ITR) under section 139, doesn’t file the return on time then he is liable to a penalty as follows 

Let us discuss the above provision below:-

AMOUNT OF PENALTY

For a person with a Total Income of more than Rs. 5,00,000. The penalty amount would be as follows:-

1. If ITR is filed on or before 31st December following the last date – Rs. 5,000
2. If ITR is filed after 31st December – Rs. 10,000

For a person with a Total Income of up to Rs. 5,00,000 – Rs. 1,000

Before 1st April 2018 – The penalty for Late Filing would be as follows-

Up to FY 2016-17, taxpayers who do not file their income tax return in the stipulated time period are liable to a fine (penalty) of Rs. 5,000.

It is further noted that liability to pay the penalty of Rs.5,000 is arises when an Income Tax Officer issues a notice for a late filing of the income tax return. It is worthwhile to note that the penalty for late filing of income tax return is based on the conclusion of the assessing officer.

Significant note:

1. If Total Earnings, that is. Income after deduction shall be less than or equal to five lakh rupees and, in that case, the sum of the fee shall not exceed Rs. 1000.
2. No penalty shall be imposed in the event of Gross Total Income i.e. Profits until deductions shall not surpass the maximum non-taxable income i.e.

• Rs. 2.50,000 for ordinary citizens (age < 60),
• Rs. 3.00000/-for senior citizens (60 years of age or older) and
• Rs. 5,000,000/-for super senior citizens (aged 80 or above).

The purpose of the implementation of the penalty under Section 234F?

In order to improve tax compliance, it is essential that income tax returns be filed within the time limit set out in section 139(1). Section 234F has now been applied to the Income Tax Act. Furthermore, the shortened time limits suggested for the assessment under different sections are also based on the pre-requisite that returns are submitted on time.

How do I pay PENALTY U/S 234F?

As per the Financing Act 2017, late fees under section 234F may be charged by way of self-assessment—-> Others, which may be paid from FY 17-18 onwards.

• Challan No. 280
• Form of payment-Self-assessment (300)
• Fill the 234F-number in the "Others" tab.

How do I prevent paying the fees referred to in section 234F to the Tax Department?

In order to prevent payment of late fees u/s 234F, the tax return must be filed on time for each assessment year:-)

Should late fees u/s 234F be waived in genuine cases?

No, fees U/S 234F are obligatory. It cannot therefore be waived by the revenue tax authority.

Is it possible to change the excess TDS deducted from the fees u/s 234F?

Yes, the income tax department will change the excess TDS deducted (which you would have got by way of refund) for the payment of late fees under section 234F.

Will the effect of the amendment referred to in section 234F have on the intimation referred to in section 143(1)?

A consequential change to section 143(1) was made in accordance with the adoption of section 234F. The fee payable under section 234F will also be included in determining the amount payable or the refund due, as the case may be on account of the collection of the refund.

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Late filing of your Income Tax Return (ITR) can have significant financial consequences, especially if you were originally eligible for deductions under the old tax regime that reduce your taxable income. Let's break down the scenario you provided:

Scenario:

• Income: ₹8,00,000
• Eligible Deductions:
  • Section 80C: ₹1,50,000
  • Interest on House Loan: ₹2,00,000
  • Standard Deduction: ₹50,000
  • Section 80D: ₹25,000
• Taxable Income under Old Regime: ₹8,00,000 - (₹1,50,000 + ₹2,00,000 + ₹50,000 + ₹25,000) = ₹3,75,000
• Tax Payable: ₹0 (since income is below ₹5,00,000, eligible for rebate under Section 87A).

Consequences of Late Filing:

If you miss the ITR filing deadline, you lose the ability to claim certain deductions (except the standard deduction) under the old tax regime. As a result:​

As above mention : you have an income of 8 Lakhs and eligible deductions of 80C 1.5 Lakhs, Interest on house loan 2 Lakhs, Standard deduction 0.50 Lakh and 80D 0.25 Lakhs. You dont have to pay tax under old regime as your income is below 5 lakhs. But if you dont file ITR by due date then your income is 7.5 Lakhs as only standard deduction is allowed. Now tax on 7.5 lakh is 25000 + interest of 234A @1% per month and then a penalty of 5000.

Difference from Timely Filing:

• If Filed on Time: ₹0 tax (due to eligible deductions)
• If Filed Late: ₹43,250 (due to tax, interest, and penalty)

The difference is significant. By not filing on time, you could face a substantial tax liability and additional penalties, even if your original taxable income under the old regime would have resulted in no tax due. Filing your ITR on time is crucial to avoid these unnecessary financial burdens. Income tax e-filing 2023-24 contains lot many deductions, new income tax slab rates, new ITR forms & ITR due date extended etc. So as to minimize your Income-tax & maximize your effective Income you must get in touch with our Income tax e-filing experts. We are always available with the best of our assistance and services for you.  For query or help, contact: info@carajput.com or call at 9555 5555 480)

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