Section 234F - Income Tax - Late Filing Penalty

Filing belated income tax returns or failure to file income tax returns attracts a penalty under the Income Tax Act. The penalty for late

filing of income tax return stands increased with effect from 1st April 2018, as per Section 234F of the Income Tax Act. In this article, we provide a brief overview of Section 234F of the Income Tax Act.

Section 234F

The newly inserted Section 234F is reproduced below for reference:

"234F. Fees for default in furnishing return of income.—(1) Without prejudice to the provisions of this Act, where a person 
required to furnish a return of income under section 139, fails to do so within the time prescribed 
in sub-section (1) of said section, he shall pay, by way of fee, a sum of—
(a) five thousand rupees, if the return is furnished on or before the 31st day of December of the assessment year;
(b) ten thousand rupees in any other case:
Provided that if the total income of the person does not exceed five lakh rupees, the fee payable under this section 
shall not exceed one thousand rupees.
(2) The provisions of this section shall apply in respect of return of income required to be furnished 
for the assessment year commencing on or after the 1st day of April 2018.".

Penalty for Late Filing Income Tax Return - With effect from 1st April 2018

As per Section 234F of the Income Tax Act, from 1st April 2018, the penalty for late filing income tax return would be as follows:

Late Filing Between 1st August to 31st December

A penalty of Rs.5000 will be applicable if an income tax return due on 31st July is filed late between the due date and 31st December of the assessment year.

Late Filing After 31st December

A penalty of Rs.10,000 will be applicable if an income tax return due on 31st July is filed late after 31st December of the assessment year.

Reduction in Penalty

If the assessment of the taxpayer reflects a total income of Rs.5 lakh rupees or less, the maximum penalty for late filing of income tax return has been capped at Rs.1000 under Section 234F.

Penalty for Late Filing Income Tax Return - Before 1st April 2018

Under the old provisions applicable for income tax returns filed up to FY 2016-17, taxpayers who late file their income tax return could be subject to a penalty of Rs.5000. However, the penalty of Rs.5000 for late filing of income tax return is not automatically levied. In case an Income Tax Officer issues a notice for late filing of income tax return, the taxpayer would have to pay the

penalty of Rs.5000. Hence, the penalty for late filing of income tax return is solely based on the discretion of the assessing officer.

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Frequently Asked Questions

Common questions about Section 234F Penalty: Income Tax Late Filing in India.

Section 234F is a new section introduced in the Income Tax Act from April 1, 2018, which imposes a fee or penalty for defaulting or delaying in furnishing the income tax return. It outlines the specific penalties applicable for late filing of income tax returns based on the duration of the delay.

The penalty under Section 234F applies when a person who is required to furnish an income tax return under Section 139 fails to do so within the prescribed time limit. The penalty is applicable for assessment years commencing on or after April 1, 2018.

If the income tax return is filed after the due date but on or before December 31 of the assessment year, a fee of Rs. 5,000 shall be payable under Section 234F.

If the income tax return is filed after December 31 of the assessment year, a fee of Rs. 10,000 shall be payable under Section 234F.

Yes, Section 234F provides a relaxation in the penalty for individuals whose total income does not exceed Rs. 5 lakh. In such cases, the maximum fee payable shall be capped at Rs. 1,000, irrespective of the duration of the delay.

Before the introduction of Section 234F, the penalty for late filing of income tax returns was at the discretion of the Income Tax Officer. A penalty of Rs. 5,000 could be levied, but it was not mandatory. Section 234F has made the penalty for late filing mandatory and has also increased the penalty amount in certain cases.

The penalty under Section 234F is a mandatory fee, and there is no provision in the Income Tax Act to waive or reduce this penalty. However, if the total income of the individual does not exceed Rs. 5 lakh, the maximum penalty is capped at Rs. 1,000.

No, the penalty under Section 234F is not payable along with the income tax return. It is a separate fee that will be levied by the Income Tax Department after the return is processed and the delay in filing is identified.

Section 234F applies to all types of income tax returns that are required to be furnished under Section 139 of the Income Tax Act, including returns for individuals, firms, companies, and other entities.

If the income tax return is filed after the due date but before the end of the assessment year (i.e., before March 31), the penalty will be calculated based on the date of filing. If the return is filed on or before December 31, the penalty will be Rs. 5,000. If the return is filed after December 31, the penalty will be Rs. 10,000, subject to the cap of Rs. 1,000 for individuals with total income not exceeding Rs. 5 lakh.