ITR Filing: Errors in ITR could lead to a ₹25,000 penalty; a ₹5,000 fee applies for delays—understand the rules

ITR Filing: Did you make any mistakes while filing your Income Tax Return (ITR)? If so, correct them in time to avoid a hefty penalty. Let’s look at the rules.

ITR Filing: If you are a salaried employee, you likely know that July 31 is the deadline for filing your ITR. It is crucial for all employees to file their ITR before this date. However, merely filing the return is not enough. Failure to file on time, providing incorrect income details, or non-compliance with tax regulations can result in penalties, interest charges, and late fees.

Mistakes can prove costly.

It is essential to keep certain key points in mind while filing your ITR and to avoid making any errors. Under Section 270A, if an individual underreports their income, a penalty amounting to 50% of the tax payable on the underreported income may be imposed. Furthermore, if incorrect information is provided deliberately, false deductions are claimed, or facts are concealed, a substantial penalty—potentially up to 200% of the tax amount—may be levied.

Penalty for late filing

There is a fixed deadline for filing ITR; filing after this deadline can attract a late fee of up to ₹5,000 under Section 234F of the Income Tax Act. However, if your total income is less than ₹5 lakh, the maximum late fee is capped at ₹1,000.

Avoid these mistakes as well.

It is not just one specific error; there are several other mistakes that could lead to penalties if overlooked. For instance, a fee of ₹200 per day may be charged for the late filing of TDS/TCS returns. Businesspersons or professionals required to maintain books of account but failing to do so may face a penalty of ₹25,000. Those required to undergo a tax audit but failing to do so may be penalized up to 0.5% of their turnover (subject to a maximum of ₹1.5 lakh).

To avoid such penalties, file your ITR on time, provide accurate details of all income, pay taxes promptly, and maintain the necessary documents and records correctly. Doing so helps avoid notices, additional expenses, and disputes with the tax department.