6 April 2018

One Return In One Year Is Now A Reality!

  • Introduction of late fees in Income Tax return for Individuals (AY 2018-19)

    With effect from 01st April 2018 a new section 234F has been introduced in the Income Tax Act. As per the provisions of this act, a penalty of up to Rs. 10,000 for filing of income tax return beyond the specified due dates.

    Following are the key considerations

    • Section 234F applies to income tax returns for AY 2018-19 (i.e. FY 2017-18) and onwards.
    • It is applicable only to cases where filing of return is mandatory (refer note below)
    • The fees payable under this section shall not exceed Rs. 1,000/- if the total income of the person does not exceed Rs. 5 lakhs.
    • There is no change in section 139(1) of the Income Tax Act which prescribes the due dates for filing of returns under the Act but there is a change only due to the introduction of late fees through section 234F.
    • With the introduction of 234F, provisions of Section 271F will become redundant for AY 2018-19 onwards.

    Cases where filing of returns is mandatory

    • If the gross total income (before allowing any deductions under section 80C to 80U) exceeds Rs. 2,50,000 in the A.Y 2018-19.
    • In case of senior citizens (more than 60 years old but less than 80 years old) this limit is Rs. 3,00,000.
    • In case of super senior citizens (more than 80 years old) this limit is Rs. 5,00,000.

    The due date for filing of income tax return for AY 2018-19 is

    Assessee Due Date
    All assesses, who are required to furnish a report under Section 92E (Transfer Pricing Audit) 30th November of AY 2018-19
    Every other company not included above 30th September of AY 2018-19
    Every other person whose Books of Accounts are required to be audited under any law
    Every individual who is a working partner of a firm, where firm’s books of accounts are required to be audited under any law
    For all other assesses not included above 30th July of AY 2018-19

    With the introduction of section 234F, the following will be the compulsory late fees payable for returns filed beyond the due dates

    Filing of return after the due date but on or before the 31st day of December Rs. 5,000/-
    Filing of return on or after 01st January and up to 31st of March (of the assessment year) Rs. 10,000/-

    The provisions of late filing fees can be summarized as below

    Late filing fees
    Before introduction of section 234F After introduction of section 234F
    If return filed on or before the due date NIL NIL
    Return filed after the due date but on or before the 31st day of December No compulsory penalty. But Income tax officer has the power to levy penalty under section 271F up to Rs. 5,000/- Rs. 5,000/-
    Filing of return on or after 01st January and up to 31st of March (of the assessment year) Rs. 10,000/-
    Filing of Return beyond 31st March of Assessment year Not allowed Not allowed

    This is a provision that will encourage individuals to file their return of income before the due date and also help the department to speed up the assessment of returns.

    Previously, filing of belated return under section 139(4) was allowed beyond the due date and up to 1 year from the end of the assessment year. But with the introduction of new provisions, filing beyond the end of assessment year will not be possible. Hence, one return in one year is now a reality!