The government is estimated to have earned up to Rs 627 crore from late ITR filing fee till August 22, 2024
The due date to file an income tax return for FY 2023-24 (AY 2024-25) for individuals not liable for tax audit, expired on July 31, 2024. If you have missed filing your ITR by July 31, 2024, you can file a belated ITR by paying a penalty. According to the Income tax department's press release dated August 2, 2024, more than 7.28 crore (7,28,80,318) ITRs for FY 2023-24 (AY 2024-25) were filed till July 31, 2024.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;} However, according to the latest data on the income tax e-filing portal, about 7.4 crore (7,42,75,307) income tax returns (ITRs) were filed as of August 22, 2024, at 3.06 pm.
Source: Income tax e-filing ITR portal as on August 22, 2024, 3.06 pmThis means that more than 13.94 lakh ITRs (7.42 crore minus 7.28 crore) were filed between August 1, 2024, and August 22, 2024. The majority of these are likely to be belated ITRs filed by individuals who missed the July 31, 2024, deadline to file. As the figures, as presented on the income tax website, appear to be comparative, therefore the assumption that most of these would be ITRs filed for FY2023-24 appears reasonable. There is no deadline for filing of ITRs for previous years near about July 31 or in August, so this increases the likelihood of these 13.94 lakh ITRs being belated ITRs for FY2023-24 (AY 2024-25).
According to income tax rules, a late filing fee of up to Rs 5,000 is levied for filing a belated ITR after the due date. Small taxpayers with taxable income up to Rs 5 lakh are required to pay a late filing fee of Rs 1,000 only. There is no late filing fee for taxpayers filing belated ITR where the total income does not exceed the basic exemption limit. In general parlance, taxpayers refer to a late filing fee as a penalty for missing the ITR filing deadline.
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Remember, the deadline to file a belated ITR is December 31, 2024, for FY 2023-24 (AY 2024-25). Therefore, a taxpayer can file a belated ITR between August 1, 2024, and December 31, 2024, for FY 2023-24 (AY 2024-25).
The government is earning revenue from the late filing fee/penalty paid by the taxpayers for filing belated ITRs. The question arises of how much would be the total fees/penalty paid by people filing belated ITRs in the last 22 days. This amount would equal the estimated revenue earned by the government from the late filing fees/penalty in the last 22 days.
How much the government may have earned from collecting penalty for filing a belated ITR
13.96 lakh ITRs were filed between August 1, 2024, and August 22, 2024, at 3.06 PM. However, the income tax department has not provided a breakdown of the type of ITRs filed between August 1, 2024, and August 22, 2024.It is possible that some of the ITRs filed during the above period in August were filed before the due date by taxpayers for whom the deadline/due date for filing ITR is October 31 or November 30. Alternatively, some of the belated ITRs filed in this period of August may not have been required to be filed with the late filing fee/penalty, or the penalty was low, at Rs 1,000.
We have assumed certain scenarios to estimate the revenue earned by the government from the Rs 5,000 late filing fee/penalty. Each scenario estimates how much money the government may have collected from levying a penalty on belated ITR filings.
Scenario 1: Assuming 10% of the 13.94 lakh ITRs have been filed by taxpayers who were not required to pay penalty or were required to pay a lower penalty of Rs 1000-i.e. the set of taxpayers described above. From 90% of taxpayers (90% of 13.94 lakh), the total penalty amount estimated to be earned by the government is (5,000 X (90% of 1394989)) = Rs 6,27,74,50,500 or about Rs 627 crore.
% of ITR filers between Aug 1-22 who did not pay/ were not required to pay a penalty
Estimated belated ITR fee amount (In Rs)
10%
627 crore
20%
557 crore
30%
488 crore
40%
418 crore
50%
348 croreScenario 2: Assuming 20% of 13.94 lakh ITRs were filed by those taxpayers who were not required to pay a penalty or paid a lower penalty than Rs 5000. From 80% of 13.94 lakh ITR filers, the total penalty amount estimated to have been earned by the government is (5,000 X (80% of 1394989)) = Rs 5,57,99,56,000 or about Rs 557 crore.
Scenario 3: Assuming 30% of 13.94 lakh ITRs by those taxpayers who were not required to pay a penalty or paid a lower penalty than Rs 5000. From 70% of taxpayers (70% of 13.94 lakh), the total penalty amount estimated to be earned by the income tax department is (5,000 X (70% of 1394989)) = Rs 4,88,24,61,500 or about Rs 488 crore.
Scenario 4: Assuming 40% of 13.94 lakh ITRs are filed before the October/ November deadline, or there is no penalty for specified taxpayers filing belated ITRs, or their penalty is Rs 1,000. For 60% of taxpayers (60% of 13.94 lakh), the total penalty amount estimated to be earned by the income tax department is (5,000 X (60% of 1394989)) = Rs 4,18,49,67,000 (about Rs 418 crore).
Scenario 5: Assuming 50% of 13.94 lakh ITRs are filed before the October/ November deadline, or there is no penalty for specified taxpayers filing belated ITRs, or their penalty is Rs 1,000. For 50% of taxpayers (50% of 13.94 lakh), the total penalty amount estimated to be earned by the income tax department is (5,000 X (50% of 1394989)) = Rs 3,48,74,72,500 (about Rs 348 crore).
Prakash Hegde, a practising chartered accountant, says, "For FY 2023-24 (AY 2024-25), the last date for filing ITR is July 31, 2024. However, if you are a partner in a firm subject to audit, or you are in business/profession and subject to audit, the last date for filing ITR would be October 31, 2024, for FY 2023-24 (AY 2024-25). As per the provisions of section 234F where a person is required to file ITR, and if he fails to file it within the above due date, he has to pay a late filing fee. As per official data from the tax department, more than 7.28 crore ITRs for FY 2023-24 were filed by taxpayers till July 31, 2024. As per the details available in the income tax portal on 22 August 2024 (at around 4.30 pm), more than 7.42 crore ITRs have been filed, i.e. about 14 Lakh (13.94 lakh) ITRs have been filed from August 1, 2024, to August 22, 2024."
Hegde says, "These 14 Lakh ITRs (13.94 lakh) may be categorised as under - i) Filed without the need for mandatory filing (where Fee under section 234F is inapplicable), ii) Filed with a late fee of Rs 1,000 (where the due date was 31 July 2024), iii) Filed with a late fee of Rs 5,000 (where the due date was 31 July 2024) and iv) Filed without any late fee as the due date might be after 31 July 2024."
We have tried to calculate the estimated amount earned based on conservative assumptions. The data shows that the government is estimated to have earned Rs 3,48,74,72,500 from collecting fees for belated ITR filing if 50% of taxpayers from 13.94 lakh ITR filers filed belated ITRs. The amount earned would be higher if the number of taxpayers filing belated ITRs is higher as shown in the calculations above. Also, as the number of people filing belated ITRs increases as time passes, the total fee so earned is also expected to increase.
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This story originally appeared on: India Times - Author:Faqs of Insurances
