Here's Why You Should Not Miss Filing ITR Before July 31

The deadline for filing Income Tax Returns (ITR) this year is July 31. Missing this deadline can have serious consequences.

If individuals do not file their ITR by July 31, they can still submit a belated return by December 31, 2024. However, failing to meet the July 31 deadline will result in automatic assignment to the new tax regime, meaning the option to select the old regime for that financial year will be forfeited.

There are currently two tax regimes - the old regime and the new regime introduced in 2020, which features revised tax slabs and concessionary rates.

If you fail to file your ITR by July 31, you can still file a late return. As per Section 234F of the Income Tax Act, a late filing fee of ₹5000 can be levied. If your income does not exceed Rs 5 lakh, the late filing fee is Rs 1,000.

Additionally, interest will be charged at the rate of 1% per month or part of the month on the outstanding tax amount from the due date, but the penalty imposed cannot exceed the amount of tax in arrears.

Late filers will also lose the opportunity to carry forward any capital losses they may have incurred. This means such taxpayers will be unable to use these losses to offset future gains, resulting in a higher tax liability in the coming years.