Income Tax Act Section 139(4) - Guide to Filing Belated Returns

Did you miss the Tax Return Filing Deadline? Filing your ITR after the initial due date is classified as a Belated Return under section 139(1). You have the opportunity to submit a late return for an assessment year from August 1 to December 31 of the corresponding assessment year. 

For instance, the belated return for AY 2023-24 can be lodged between August 1 and December 31, 2023. In the dynamic landscape of taxation, understanding the nuances of Section 139(4) is your key to financial resilience. Read on to more about section 139(4) of the Income Tax Act.

What is a Belated Return?

A belated return is when an individual fails to file their income tax return by the original due date of 31st July each year and submits it afterward but before 31st December of the same year. This applies to individuals who don't undergo a mandatory audit.

For those subject to an audit, the deadline is 30th September. Any return filed after these respective deadlines is termed a belated return under section 139(4). It's important to note that filing a belated return may lead to penalties and additional interest on taxes owed.

Consequences of Delayed Income Tax Return Filing

Late submission of an Income Tax Return (ITR) carries the following consequences:

1. Interest Penalty Under Section 234A:

   - The taxpayer is obligated to pay simple interest at a rate of 1% per month or part of a month for the delay in filing the ITR. This interest accrues from the day after the due date until the actual filing date. For instance, if the due date is 31/07/2022, and the ITR is filed on 15/10/2022, interest under Section 234A is applied for 3 months.

2. Late Filing Fees Under Section 234F:

   - The maximum penalty for the late filing of a return is Rs.5,000/-

   - If the total taxable income exceeds Rs.5 Lakh, the penalty is Rs. 5,000/-

   - If the total income is less than Rs.5 Lakh but more than Rs. 2,50,000, the penalty is Rs.1,000/-

   - No penalty is imposed if the total income is less than Rs. 2,50,000.

These penalties aim to encourage timely filing of ITRs and vary based on the taxpayer's income level.

Limitations of Filing Under section 139(4)

Filing a return under section 139(4) comes with certain limitations. One limitation is that losses can not be carried forward under the categories of capital gains and business and profession. However, losses from house property and unabsorbed depreciation can still be carried forward even if the return is filed belatedly.

Some deductions are disallowed, including those under sections 10A, 10B, 80-IA, 80-IB, 80-IC, 80-ID, and 80-IE. Additionally, if there's a delay in filing and the taxpayer is eligible for a refund under section 244A, they may lose interest on that refund.

When filing a return under section 139(4), it's not possible to change the tax regime. If a person fails to file their belated return, the income tax department may issue a notice prompting them to do so.

Who is Eligible For Belated Return Filing Under Section 139(4)?

Starting from the financial year 2019-20, filing an income tax return is mandatory under the following circumstances:

1. If an individual's total income exceeds Rs. 2,50,000.

2. When the amount deposited in a current account with a bank or cooperative bank goes beyond Rs. 1 crore in a financial year.

In essence, individuals who are obligated to file an income tax return and have missed the original filing deadline can opt for a belated return. To do this, taxpayers should choose section 139(4) on the e-filing portal.

Also Read: Last Opportunity: File Belated Income Tax Returns For FY23 By December 31 if You Have Not Done So Yet

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