The deadline for filing Income Tax Returns (ITR) for the fiscal year 2022-23 is no longer a distant deadline, but rather an impending one as the year comes to an end. If you haven't filed your ITR yet, the deadline is December 31, 2023, however there are penalties and interest for late submission.

A late filing fee of Rs 5,000 is levied under Section 234F of the Income Tax Act for people who fail to file their tax returns by the customary due date. This fee is decreased to Rs 1,000 for taxpayers with a total income of less than Rs 5 lakhs.

In addition, interest is charged for late filing of taxes. "In case of late filing of return, taxpayers will be liable to pay interest under section 234A at the rate of 1% for every month, or part of a month, on the unpaid tax amount," Sanjoli Maheshwari, Executive Director, Nangia Andersen India, explained.

If you miss the ultimate deadline of December 31, 2023, you will face severe financial consequences. "If the deadline of December 31 is missed, the taxpayer will face penalties and interest." However, the taxpayer may still file an updated tax return within 24 months of the end of the relevant assessment year, subject to additional income tax and penalties. "An updated return cannot be filed to claim a refund of tax paid," said Yeeshu Sehgal, AKM Global's Head of Tax Market. As a result, ITR-U can be filed for the current fiscal year 2022-2023 until March 31, 2026.

"If the taxpayer misses the deadline for filing a belated return, he or she will not be able to file ITR for FY 2022-23 unless the Income Tax Department receives a notice to file the ITR." Alternatively, if the ITR filing date is missed due to "genuine reasons," the taxpayer may file a condonation of delay request under section 119 and ask the income tax authorities to excuse the delay while explaining the reason for missing the deadline. In this situation, the penalty will be Rs10,000, plus 1% interest till the return is filed. In addition, failing to file the ITR may result in prosecution under section 276 CC of the Income-tax Act," Sehgal explains.

When it comes to filing your ITR, procrastination is costly. The consequences can be significant, and time is never returned. 'Beware of small expenses,' as Benjamin Franklin wisely observed. A little leak can sink a massive ship.