Missed the ITR filing deadline? Here's how to file now, what it will cost

Taxpayers can still file a belated return by December 31, but they may have to pay a late fee, interest and forgo certain tax benefits available with timely filing

Missed the July 31 income tax return (ITR) filing deadline for FY26? While the deadline has passed, taxpayers still have an opportunity to comply by filing a belated return. However, the delay comes at a cost. Apart from a late filing fee and interest on unpaid taxes, taxpayers may lose the benefit of carrying forward certain losses, receive lower interest on delayed refunds, and even face delays in loan or visa processing. Here's what taxpayers need to know about filing an ITR after the due date and the financial consequences of missing the deadline.

 

Who had to file ITR by July 31?

 

Individuals who are not required to get their accounts audited—such as salaried employees, pensioners and most taxpayers without business or professional income—were required to file their income tax returns by July 31. “Individuals having business or professional income whose accounts are not required to be audited can file their returns by August 31,” says Neeraj Agarwala, senior partner, Nangia & Co LLP.

 

Key consequences of late filing

 

According to tax experts, missing the due date can result in a late filing fee under Section 234F, interest on unpaid taxes under Section 234A (and, where applicable, Sections 234B and 234C), loss of the ability to carry forward business and capital losses, possible delays in receiving tax refunds, lower interest on refunds, and practical difficulties in loan and visa applications, where timely ITRs are often sought as proof of financial discipline.

 

“For instance, a late-filing fee under Section 234F is payable if the income tax return is filed after the due date. The fee is ₹1,000 if the taxpayer's total income does not exceed ₹5 lakh, and ₹5,000 in all other cases,” says Agarwala.

 

Interest on unpaid tax

 

If any self-assessment tax remains unpaid after the due date, interest under Section 234A is charged at 1 per cent per month or part of a month on the outstanding tax amount, from the due date of filing the return until the date the return is filed or the tax is paid, whichever is earlier. “Depending on the taxpayer's circumstances, interest under Sections 234B and 234C may also apply. Taxpayers can use the interest calculator available on the Income Tax Department's e-filing portal to calculate the applicable interest,” informs Agarwala.

 

Losses that cannot be carried forward

 

Business losses and capital losses can generally be carried forward only if the income tax return is filed within the due date prescribed under Section 139(1) of the Income-tax Act. “If the return is filed belatedly, these losses cannot ordinarily be carried forward and set off against future income,” observes Agarwala.

 

However, certain losses, such as unabsorbed depreciation, can still be carried forward even if the return is filed after the due date.

 

Will a late ITR delay your refund?

 

A tax refund is not issued automatically just because excess tax has been deducted or paid. It becomes payable only after the taxpayer files a valid ITR, which is then processed by the Income Tax Department. “Filing a belated ITR does not result in the rejection of a refund claim, but it can delay the processing of the return and, consequently, the release of the refund. If the return is selected for scrutiny or contains discrepancies that require clarification, the refund may be delayed further,” says Vishwas Panjiar, managing partner, SVAS Business Advisors LLP.

 

Timely filing also helps preserve the taxpayer's entitlement to interest on the refund, wherever applicable under the Income-tax Act.

 

Does late filing reduce refund interest?

 

Delayed filing of an ITR can reduce the interest payable on a tax refund. If the return is filed within the due date, interest on the refund is generally calculated from April 1 of the relevant assessment year until the refund is granted. “However, if the return is filed late, interest is generally calculated only from the date of filing the ITR, reducing the overall interest amount. Any delay in granting the refund that is attributable to the taxpayer may also be excluded while calculating the interest payable,” points out Panjiar.

 

Less time to fix ITR errors

 

Filing an ITR after the due date leaves taxpayers with less time to review the return and identify errors before it is processed by the Income Tax Department. Although a revised return can still be filed within the prescribed time limit or apparent mistakes can be rectified after processing, timely filing provides more time to reconcile the return with the Annual Information Statement (AIS), Form 26AS, Taxpayer Information Summary (TIS) and other financial records, reducing the chances of discrepancies.

 

Can a late ITR affect loans and visas?

 

A belated ITR is still a valid return, but timely filing is often an important factor in loan and visa applications. “Banks and NBFCs typically seek recent ITRs to assess an applicant's income, repayment capacity and creditworthiness, while embassies may require them as proof of financial stability and tax compliance,” informs Panjiar.

 

Although a delayed ITR does not automatically lead to rejection, it may result in additional scrutiny, requests for more documents or delays in processing.

 

Key points for filing a belated return

 

A belated return is an ITR filed after the prescribed due date. Taxpayers who miss the original deadline can file a belated return by December 31 of the relevant assessment year.

 

A belated return attracts a late filing fee of ₹5,000, which is reduced to ₹1,000 if the taxpayer's total income does not exceed ₹5 lakh. “For most taxpayers, a belated return can generally be filed only under the new tax regime, as the option to opt for the old tax regime is ordinarily not available after the due date. Taxpayers also lose the benefit of carrying forward business and capital losses. In addition, interest under Sections 234A, 234B and 234C, wherever applicable, may also be payable,” says Rupali Singhania, founder, Areete Consultants.

 

If the deadline for filing a belated return is also missed, taxpayers can file an Updated Return (ITR-U). An updated return can be filed within four years from the end of the relevant assessment year.

 

“Unlike a belated return, which attracts a flat late fee of ₹1,000 to ₹5,000 under Section 234F, an ITR-U is significantly more expensive. In addition to the regular tax liability and applicable interest, taxpayers are required to pay an additional tax,” says Singhania.