The deadline to submit income tax audit report is October 7, 2024

New deadline for submitting tax audit report is approaching; File it else be ready to pay Rs 1.5 lakh or 0.5% of sales as penalty

The income tax audit deadline is on October 7, 2024, for FY 2023-24 (AY 2024-25). However, this deadline is an extended deadline, which means if you were pinning your hopes on the extended deadline, don't. The original deadline for submitting income tax audit report on the e-filing ITR portal was September 30, 2024. The government is unlikely to extend the deadline again.

"In response to a representation made by "Associated Chamber of Commerce & Industries" #Udhampur, a request was made to the Hon'ble Finance Minister for extension of the date for filing of Audit Report for Assessment Year 2024-25. Thank you Smt Nirmala Sitharaman ji @nsitharaman for conceding the request and issuing the orders accordingly," said Union Minister Dr Jitendra Singh on X (formerly Twitter).

— DrJitendraSingh (@DrJitendraSingh)

What happens if you fail to file a tax audit report on or before October 7, 2024

According to SR Patnaik, Partner (Head - Taxation), Cyril Amarchand Mangaldas, the deadline extension has been provided only for the electronic filing of the tax audit reports by seven days to October 7, 2024.

"This means that the tax audit ought to have been completed by September 30, 2024, and the filing can be made by October 7, 2024. In case these deadlines are not, then there would be consequences as prescribed under the provisions of the Income Tax Act, 1961. For non-compliance with section 44AB (tax audit), you will be charged a penalty of 0.5% of total sales or turnover or gross receipts or Rs 1.5 lakh, whichever is less," Patnaik says.

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Your ITR can be considered defective if a tax audit report is not submitted

Only those taxpayers who are liable to conduct an income tax audit need to first upload the audit report and then file an ITR; both processes are linked with each other and can't be skipped. The original deadline to file ITR, if tax audit is applicable in your case, is October 31, 2024, for FY 2023-24 (AY 2024-25).

"If you do not upload the tax audit report even after the deadline by paying a penalty then your income tax return (ITR) will be considered defective," says Patnaik from Cyril Amarchand Mangaldas.

Skipping to file a ITR even though tax audit is filed has equally bad consequences

According to Parveen Kumar, Partner, Direct Tax at Dewan P N Chopra & Co., if you miss the income tax deadline of October 31, 2024, for FY 2023-24 then you have to file a belated ITR. "Even such ITRs can also be filed only up to 31st December of the relevant assessment year involved," he says.

Kumar explains the consequences of filing a belated return:

Late fees under section 234F- Rs 1000 shall be payable. (Rs 5000 if declared income exceed Rs 5 lakh),
Interest on outstanding tax,
Losses cannot be carried forward.

According to Kumar, here are the consequences of not filing any ITR even if tax audit report is submitted:

Penalty: Assessing officer can levy a Penalty of Rs 5000 under section 271F.
Interest on tax due: Interest under Section 234A may be charged on the outstanding tax liability.
Issuance of notice for reassessment under section 148: Tax department may take up the matter for detailed scrutiny by issuing notice for income escaping assessment under section 148.
No carry-forward of losses: Any losses, such as business losses or capital losses incurred by taxpayers, cannot be carried forward to future years if the ITR is not filed within the due date.
Prosecution: In some cases, especially when the total tax liability is significant, the Income Tax Department may initiate prosecution for non-filing of ITRs.

This story originally appeared on: India Times - Author:Faqs of Insurances