The deadline to file your Income Tax Return (ITR) for the Financial Year 2024-25 (Assessment Year 2025-26) is fast approaching. For individual taxpayers and those not requiring an audit, the due date is September 15, 2025. Missing this deadline can lead to several penalties and consequences, making it crucial to understand why timely filing is essential.

Why File by September 15, 2025?

• Avoid Penalties: Filing your ITR after the due date attracts penalties. Under Section 234F of the Income Tax Act, a late filing fee of up to Rs. 5,000 can be levied. However, if your total income is below Rs. 5 lakh, the penalty is reduced to Rs. 1,000.
• Interest Charges: In addition to the late filing fee, delaying your ITR submission will incur interest charges on any outstanding tax amount. Section 234A of the Income Tax Act specifies that interest is charged at 1% per month or part of a month on the unpaid tax, calculated from the due date until the actual date of filing.
• Carry Forward Losses: Timely filing allows you to carry forward losses, such as capital losses, which can be used to offset future capital gains, potentially reducing your tax liability in subsequent years. If you miss the deadline, you may lose the ability to carry forward losses, except for losses on house property.
• Expedite Refund Processing: Filing your ITR on time ensures faster processing of any tax refunds you may be eligible for. Delays in filing can lead to delays in receiving your refund.
• Financial Record: ITR serves as an official financial record that is often required for various financial transactions, such as loan applications and visa processing.
• Contribute to National Development: The Income Tax Department emphasizes that filing your return is a duty that contributes to the nation's development.
• Maintain Financial Discipline: Filing ITR even if the income is below taxable limit will help to maintain financial discipline.

Consequences of Missing the Deadline

• Late Filing Fee: As mentioned earlier, a late filing fee under Section 234F will be applicable. The fee can be up to Rs. 5,000, but it is restricted to Rs. 1,000 if your total income does not exceed Rs. 5 lakh.
• Interest on Unpaid Tax: Interest under Section 234A will be charged at 1% per month or part of a month on the outstanding tax amount.
• Loss of Certain Deductions: Delaying the filing of ITR may result in the loss of certain deductions under sections 10A, 10B, 80-1A, 80-IB, 80-IC, 80-ID and 80-IE.
• Inability to Carry Forward Losses: You may not be allowed to carry forward losses to offset future income, which could increase your tax liability in the future.
• Delayed Refund: If you are eligible for a refund, it may be delayed if you file your return after the due date.
• Potential Scrutiny: Filing after the deadline may increase the chances of your return being scrutinized by the Income Tax Department.
• Difficulty in Obtaining Loans and Visas: ITR is often used as proof of income and financial stability when applying for loans or visas. Late filing can create complications in these processes.
• Facing Penalties for Tax Evasion: If tax evasion is suspected, penalties ranging from 50% to 200% of the tax due can be levied. In extreme cases involving evasion exceeding ₹25 lakh, prosecution leading to imprisonment ranging from 6 months to 7 years could occur.

Filing a Belated Return

If you miss the September 15, 2025 deadline, you can still file a belated return until December 31, 2025. However, you will be subject to late filing fees and interest charges. Moreover, you will lose the benefit of carrying forward certain losses.

Updated Return (ITR-U)

Even after the belated return deadline (December 31, 2025) has passed, there is still an option to file an Updated Return (ITR-U) under section 139(8A) of the Income Tax Act. This can be done within 48 months from the end of the relevant assessment year, subject to certain conditions and with an additional tax liability.

Conclusion

While the government extended the ITR filing deadline for AY 2025-26 to September 15, 2025, for non-audit taxpayers, it is crucial to utilize the remaining time to file your return accurately and on time. Filing by the due date helps you avoid penalties, interest charges, and other adverse consequences. Aim to file your ITR well before the deadline to avoid any last-minute complications.