File ITR by November 15, 2024 and tax audit report if not already filed or risk getting slapped with double penalty for ITR and tax audit report failure

ITR filing deadline is November 15, 2024 for these taxpayers; file tax audit report before filing ITR

The deadline for filing the income tax return (ITR) for FY 2023-24 is November 15, 2024, for those taxpayers subject to an income tax audit and other designated taxpayers. If you're hoping for an extension of this deadline, it's important to note that this is already an extended deadline, as the original deadline was October 31, 2024. To date, there has been no announcement regarding any further extensions to this revised deadline, making it unlikely that the government will decide to push it back again under the current circumstances.

What do you need to do before filing ITR by November 15, 2024

The process of filing your ITR is closely tied to the submission of a tax audit report. Experts emphasize that the details provided in the tax audit report must be referenced in the ITR, highlighting the interconnected nature of the two. Therefore, it's essential to submit your tax audit report prior to filing your ITR.

According to Chartered Accountant Prakash Hegde, "The taxpayer liable for income tax audit has to give the details of the tax audit in his ITR (including the date of furnishing audit report, acknowledgement number of audit report etc.). Unless the tax audit report is submitted, these details cannot be filled in the ITR. Therefore, filing a tax audit should precede filing the ITR of the taxpayer."

According to Anita Basrur, Partner, Sudit K. Parekh & Co. LLP the ITR form itself does not get uploaded if you missed filing the tax audit report. "This is because the ITR forms require the date of uploading the tax audit report. If the field is left blank, the returns do not get uploaded," she said.

The deadline for submission of tax audit report for FY 2023-24 was September 30, 2024, which was later extended to October 7, 2024. If you missed the deadline, make sure to submit the tax audit report before filing your ITR. Failing to do so puts you at risk of two violations of the law: not filing the ITR and missing the submission of the tax audit report.

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According to Akshay Jain - Partner - Direct Taxation Advisory - NPV & Associates LLP, "If the taxpayer has missed the deadline for submitting the Tax Audit report (originally September 30, 2024, extended to October 7, 2024), it is recommended that they first file the tax audit report by paying the penalty (if any imposed) and then submit the ITR by November 15, 2024. Failure to do so will result in the ITR being treated as defective. A penalty for the late filing of the tax audit report may be imposed, which can be up to Rs 1.5 lakh or 0.5% of total sales, whichever is lower."

Do note that the income tax department has the power to levy a penalty for late filing of tax audit report. "These penalties are generally not automatic but may be applied during a tax department scrutiny," says Gaurav Makhijani, Associate Partner, and Head of Tax (North India and Gujarat) at Roedl & Partner India.

"If a taxpayer fails to submit a required tax audit report by the due date (October 7, 2024), they are not eligible for the extended ITR filing deadline of November 15, 2024. The extension applies only to those who submitted their audit report on time. Missing this audit deadline results in losing the November 15 extension, and any late filing would be subject to penalties, including a possible fine under Section 271B and interest on any unpaid taxes," says chartered accountant Abhishek Soni, co-founder, Tax2Win.

Which taxpayers need to file ITR by November 15, 2024 for FY 2023-24

According to Hegde, the following taxpayers need to file ITR by November 15, 2024, for FY 2023-24:

A company (e.g. an Indian company, or a foreign body corporate including a foreign company)
Taxpayers whose accounts have to be audited under any law (e.g. under income tax act or limited liability partnership act or co-operative societies' act etc.).
Partners of a firm whose accounts have to be audited under any law.

"However, for transfer-pricing cases, i.e. if the taxpayers have any international or specified domestic transaction, the deadline for filing ITR would be 30 November 2024," says Hegde.

What is the ITR filing deadline for transfer pricing tax audit cases?

As noted by Makhijani, taxpayers involved in transfer pricing tax audit cases can relax, as the ITR filing deadline of November 15, 2024, does not apply to them.

"Taxpayers engaged in transactions with overseas group companies for FY 2023-24 must submit a transfer pricing audit report in Form 3CEB by 31 October 2024. For these taxpayers, the deadline to file the income tax return (ITR) is 30 November 2024," says Makhijani.

If the transfer pricing report has not yet been filed, it must still be submitted, as some filing details from Form 3CEB are required in the ITR. "Missing the Form 3CEB transfer pricing tax audit deadline can lead to a penalty of Rs 1 lakh with an additional 2% of the transaction value for international transactions with related parties. Failing to meet the 30 November 2024 deadline for the ITR will prevent the taxpayer from carrying forward any losses for FY 2023-24," says Makhijani.

What can happen if you fail to file ITR by November 15, 2024

If you were required to file your Income Tax Return (ITR) by November 15, 2024, but failed to do so, you will need to submit a belated ITR while also paying a penalty fee.

"If a taxpayer fails to file the Income Tax Return by November 15, 2024, they can still submit a belated return by December 31, 2024. However, the taxpayer will be subject to certain consequences, including interest under Sections 234A and 234B. A penalty will also be imposed under Section 234F, which could range from Rs 1,000 to Rs 5,000, depending on the taxable income.," says Jain.

According to Basrur, if you're submitting a belated Income Tax Return (ITR) after having filed the tax audit report on or before the deadline, you might face the following consequences:

"The taxpayer will have to bear the consequences for filing of belated return mentioned as below:
- late filing penalty up to Rs 5,000
- No carry forward of losses allowed
Another aspect worth noting is that even with the extension in place, interest under section 234A & B will still apply in case there is a tax liability."

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