Failure to file Income Tax Returns (ITR) on time can lead to penalties, interest, loss of tax benefits, and delays in refunds. Additionally, it can complicate loan and visa application processes. The deadline is September 15, 2025, and the department has not yet announced any extension.
New Delhi: The last date for filing Income Tax Returns (ITR Filing 2025) is set for September 15, 2025. According to experts, filing ITR on time is not merely a legal formality but a necessity for financial stability. Delays can result in penalties, interest, and the loss of the right to carry forward losses. Furthermore, it can create hurdles in bank loan and visa applications. Therefore, filing returns promptly is crucial.
Penalties for not filing ITR on time
Under the Income Tax Act, individuals who file their ITR late are liable to pay a late fee under Section 234F. If your annual income is less than ₹5 Lakh, you may have to pay a penalty of up to ₹1,000. For those with an income exceeding ₹5 Lakh, this penalty can be up to ₹5,000. This penalty is in addition to the tax amount you owe to the government.
Interest will be levied on outstanding tax
If you have tax dues and have not filed your return by the stipulated date, interest will be charged under Sections 234A, 234B, and 234C. Interest will continue to accrue on the outstanding tax until it is paid. Delay means your tax burden will steadily increase.
Loss of carry-forward benefits
If you have incurred capital losses from investments such as shares, property, or mutual funds in the current financial year, you can typically adjust these against your profits in subsequent years. However, if you fail to file your ITR on time, this facility will be forfeited. This means your losses will not be adjusted against future profits, thereby increasing your tax liability.
Refunds will be delayed
For many, tax refunds provide significant financial relief. However, if you file your ITR late, the refund process will also be delayed. The longer you wait to file, the longer it will take for the money to reach your account. For individuals expecting substantial refunds, this delay can be a cause for concern.
Increased risk of Income Tax notices
Tax experts believe that filing a delayed or incomplete return increases the likelihood of receiving notices from the Income Tax Department. The department may ask for reasons why you did not file your return on time. In such a scenario, you might have to undergo a lengthy compliance process, which can be a burden both financially and mentally.
Difficulties in obtaining loans
In today's times, banks and financial institutions conduct a thorough assessment of an applicant's financial situation before approving loans. Income Tax Returns serve as a crucial document for this purpose. Whether you are applying for a home loan, car loan, or personal loan, banks invariably ask for a copy of your ITR. If you have not filed your return on time, you may face difficulties in getting your loan approved.
Impact on visa processing
Income Tax Returns also play a significant role in the visa application process for those planning to travel abroad. Many countries require proof of financial stability from applicants, for which ITR is considered the most important document. If you do not have an updated ITR, your visa application process could be affected.
