Prior to AY 2018-19, a taxpayer filing belated income tax return was required to pay a penalty of Rs.5,000/- under section 271F. This penalty was levied at the discretion of the Assessing Officer (AO).
In general, the Assessing officers were waiving off the penalty for belated return [u/s 139(4)] if:
- Income was below the taxable threshold limit
- Full TDS was deducted from the total income
- Appropriate advance tax and self-assessment tax were paid
The penalty was levied after the filling of return and due to this many taxpayers were not filing their ITR on a timely basis. The government was incurring both time and revenue loss due to the discretionary power of the Assessing officer to impose the penalty.
In Budget 2017, Government introduces a new section 234F for imposing fees (not penalty) on the late filing of Income Tax return (ITR) and simultaneously stopped the application of section 271F.
In this article, we will cover various aspects of section 234F.
Applicability of Section 234F
Section 234F is applicable from FY 2017-18 [AY 2018-19]
This section applies when a taxpayer files original ITR [Income tax return] after the due date prescribed under section 139(1).
For FY 2018-19 [AY 2019-20] the due date for filling ITR under section 139(1) is:
- 31st August 2019 [For Individuals not requiring tax audit]
- 31th October 2019 [Business or individuals requiring Tax Audit]
- 30th November 2019 [Individual who is required to file a Transfer pricing report under section 92E]
Late Fees doesn’t apply while revising original return which was filed within the due dates.[u/s 139(5)]
Amount of Fees under Section 234F
A taxpayer shall pay late fees while filing Income tax return (ITR) under this section up to a maximum limit specified in the table below:
|Sl No||Total Income
[Explained in next heading]
|Filling Date||Fees under section 234F|
|1.||Any person with total income up to Rs.5 lakh||Any time after
due date of section
|2.||Any person with total income exceeding Rs.5 lakh||Filed up to 31st December of the Assessment Year
[ 31st Dec 2019 for AY 2019-20]
|3.||Any person with total income exceeding Rs.5 lakh||Filed after 31st December of the Assessment Year
[ like 1st Jan 2020 for AY 2019-20]
- This section is applicable to all taxpayer such as individual, HUF, BOI, AOP, Company, Trust, Firm etc.
- Assessing officer doesn’t hold any power for either levying or waving off such fees.
- Pay late fees as self-assessment tax [u/s 140A]
The amount of late fee depends on the total income of a person and the timing of his return filing.
The timing of return filing is clearly stated in the above table.
For now, we need to find out what constitutes a total income.
The word “total income” represents an income on which tax rate is applied.
In other words, the total income is the taxable income after the deduction of chapter VI-A (like 80C to 80U) but before excluding the income tax rebate. [stated the obvious one]
Below is an image of ITR-1 [Java Format]:
Source: Bare Income Tax Act