Income Tax Late Fee For AY 2022-23 (New Guide)

You should file your Income Tax returns if your annual income exceeds 2.5Lakhs. It is mandatory as your ITR provides a lot of benefits for you as well as for the nation. 

You need to file your ITR within the due date given by the Income Tax Department. If you fail to file your returns within the due date, you are liable to a penalty for late filing of ITR.

Penalty for late filing of ITR has many options and forms. Let us examine the Income tax late fee for ay 2022-23 for more details.

What is the late fee for an income tax return?

You are liable to a penalty if you fail to file your ITR within the due date. July 31, 2023, will be the last date for filing your ITR for the Annual Year 2022-23. There will be a penalty for late filing of your ITR.

1. Your penalty is Rs 1000 if your annual income is somewhere between Rs2.5 Lakhs to 5 Lakhs.
2. You must pay a penalty of Rs 5000 if your annual income exceeds Rs 5 lakh.
3. Your penalty can go up to Rs 10000 if you file your ITR after December but before March 2024.
4. You have to pay an interest of 1% per month or a part of a month on the outstanding tax amount as per Section 234A if you do not file ITR within the due dates.
5. You cannot file ITR if your tax amount remains unpaid.
6. Your interest is after the due date, generally July 31 of a particular assessment year. If you delay more in your tax filing, you should pay more interest, thus increasing the penalty for late filing of ITR.
7. If you didn’t file TCS or TDS statements within the due date, you have to pay a penalty of Rs. 10,000 to Rs. 1,00,000 in addition to the fine under Section 234E for late filing. The fine under Section 234E is Rs. 200 per day till you pay your TCS or TDS.

You should file your ITR within the due date to avoid adverse consequences and penalties. In case of late filing, you should clear the necessary fine and do the next ITR within the due date.

How does the IRS calculate the late payment penalty?

IRS is the Indian Revenue Service. IRS is an agency that collects revenue in India. 

The IRS plays a crucial role in levying and collecting taxes, penalties, etc.

The IRS calculates your late payment as 1% interest per month on the tax amount outstanding. If you delay further in filing your returns, your interest accumulates, and you should pay an ample amount as a late fee/penalty.

What happens if you miss a monthly payment with the IRS?

If you miss your payment, you will charge a 1% late fee for a subsequent month till you file and pay your taxes. Your late fee will accumulate each month with a 1% increase in an interest rate until you pay your taxes.

How do I know if I have a late fee?

Late fee for filing your belated returns comes under Section 234E of the Income Tax Act. If you fail to file your returns within the due date, you have a late fee of Rs.5000 (your annual income is above five lakhs), provided you file your ITR by December 31 of the same assessment year.

You may receive a notification regarding your ITR and late fee from the Income Tax Department. You have to take action immediately to avoid the accumulation of your penalty.

What is the highest late fee allowed by law?

You need to pay a late fee of Rs 10000 if you file your returns after March next year. This fee of 10000 may increase up to Rs 1,00,000 if you delay filing your returns.

However, the late fee cannot exceed the amount of tax deducted at the source.

How can I pay my late ITR penalty?

If you fail to file your returns within the due date, you are liable to a penalty depending upon your income. This penalty comes under Section 234F of the Income Tax Act.

You can pay the penalty by filing a belated ITR using Challan Number 280. The payment is made online through the NSDL website or bank branch.

FAQ- Income tax late fee for ay 2022-23

1. How do I ask for a waiver of late fee payments?

You cannot waive your late fees, which come under Section 234E. You should pay late fees for late returns. To avoid this issue, be aware of the due date and file your ITR before that.

2. Can I file ITR without penalty?

You should file your ITR within the due date (July 31) of every financial year to avoid the penalty. If you fail to file your returns by July 31, you have till December 31 to file your ITR with 5000 Rs as a penalty.

However, post-December 31, you should pay a penalty of 10000 Rs for filing your returns. This penalty cannot be changed or skipped by anyone.

But if your income is under the exemption limit, you need not pay any penalty to file your returns. 

3. What happens if the tax return is late?

If you have missed the deadline for filing your ITR, i.e., July 31, you can file belated returns. However, you are liable to a penalty for late filing of ITR.

4. Is a late filing fee a penalty?

If you fail to furnish a TDS return on or before the due date, you are liable to pay a late filing fee under section 234E of the Income-tax Act. 

You are liable to pay a late filing fee of Rs 200 per day until you file your TDS return. Further, the assessing officer may levy a penalty under section 271H. The minimum penalty amount is Rs 10,000, and the maximum is Rs 1 lakh. 

Incorrect filing of TDS returns can also attract a penalty of up to Rs 1 lakh.

5. Can I refuse to pay a late fee?

The simple answer to this is NO. If you file a belated return, you should pay the late fee of Rs 1000 or 5000 per your income slab. 

However, if you are under the income exemption limit, you are not liable to pay the late fee.

6. Does a 7-day late payment affect my credit score?

Your late payment of tax does not impact your credit score. 

Your credit history does not take care of your tax filings. However, if you pay your tax through your credit card, it will be in your credit history. Any delay in your tax payment may impact your credit history less.

Unless you use your credit card for tax payments, you are not liable for any degradation in your credit score.

Bottomline

So you got to know about the Income tax late fee for ay 2022-23, You should file your ITR within the due date i.e, July 31 of every financial year. If you fail to file your returns within the due date, you are liable to a penalty for late filing of ITR. You might be aware of the penalty for late filing of your ITR in this article. Keep an eye on the due dates and file your returns to avoid such circumstances.

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