Income Tax Late Fee and Interest on delay in filing ITR

Income Tax Late Fee

The Ministry of Finance announced the extension of the last date of filling Income Tax Return(ITR) for FY 2019-20 from 31st July 2020 to 30th November 2020 and again extended to 31st December 2020 for individuals. If you do not file your income tax return within due date i.e. before 30th November 2020, you will be liable to pay Income Tax Late Fee and Interest on delay in filing ITR.

Income Tax Late Fee for late filling ITR under Section 234F

If the taxpayer fails to file his Income Tax Return before 31st December 2020, he will be liable to pay ITR late filing fees of:

  • Rs 5000, if ITR is filed after the due date but on or before December 31 of the relevant assessment year (in this case December 31, 2020). – Not levied due to COVID-19
  • Rs 10,000 if ITR is filed after December 31 but before the end the relevant assessment year, i.e., before March 31 (in this case between 1 January 2021 and March 31, 2021).

However, if the total income of person does not exceed Rs 5,00,000, the fee payable shall not exceed Rs 1,000. That is to say,

Late Filing Fee for FY 2019-20

 Date of FilingTotal income Below Rs 5,00,000Total income Above Rs  5,00,000
30th November 2020Rs  0Rs  0
Between 1st Dec 2020 to 31st Dec 2020Rs 0Rs  0
Between 1st Jan 2021 to 31st March 2021Upto Rs  1,000Rs  10,000

However, when Gross Total Income is below exemption limit liable to Income Tax, no Late fee is charged.

Read Also: 15 Reasons you may get Income Tax Notice

Interest for late filling of Return under Section 234A

  • An assessee shall be liable to pay interest @1% per month or part of the month for late filling of return.
  • Interest is calculated on the amount of tax due, i.e. tax assessed on the total income less
    • Advance tax,
    • TDS,
    • TCS
  • Period of interest is from the due date of filling return of income upto the date of furnishing of return of income.

Example –

Mr. Kumar is running a medical store. The due date for filing the return of income in his case is 31st December 2020. He filed his return of income on 3rd March 2021. Tax liability of Mr. Kumar for the year is Rs 28,400 (which is paid on 3rd March). Advance tax paid by him is Rs 15,000 and he has TDS credit of Rs 5,000.

In this case Mr. Kumar is liable to pay interest under section 234A as he filled his return after 31st December 20.

Time for delay is 2 months 3 days. Three days will be considered as a complete month hence the period of interest will be 3 months.

Amount of interest will be calculated on Income Tax due less advance tax and TDS. Hence, Interest will be calculated on Rs 8400 (i.e. 28,400- 15,000 – 5,000).

Interest Liability = Rs 8400 x 1% x 3 = Rs 252

Read Also: Income Tax Rate For AY- 2020-2021/ FY- 2019-2020

Carry forward of Losses

  1. Loss under Profit or Gain from Business or Profession (PGBP) and Capital Loss can be carried forward only if Return of Loss (Because of zero net income Return of Income becomes Return of Loss) is filled within due date.
  2. Loss under House Property and Unabsorbed Depreciation can be carried forward even if Return not filled upto the due date. 

Read Also: 10 new Changes in Income Tax Return Forms for A.Y. 2020-2021


The author of the above article is Manav Khanna.

Disclaimer:The article or blog or post (by whatever name) in this website is based on the writer’s personal views and interpretation of Act. The writer does not accept any liabilities for any loss or damage of any kind arising out of information and for any actions taken in reliance thereon. 
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