The final deadline to file Income Tax Returns for Assessment Year 2020-21 is December 31. The deadline for filing tax returns was extended multiple times this year in light of the pandemic. However, it's unlikely to be extended any further.
Here is what will happen if a taxpayer does not file tax returns on time:
1. If a taxpayer misses the ITR due date, his/her returns will be processed late and the refund amount, if any, will be released late.
2. A late filing fee will be applicable for filing your returns after the due date under section 234F. The penalty can be up to Rs 10,000 if the assessee files the return after the due date. For a small taxpayer, whose income is below Rs 5 lakh, the penalty will be Rs 1,000 if ITR is filed after the expiry of the deadline.
3. Besides, a delay in filing ITR also makes one liable to pay interest. As per the section 234A of the Income Tax Act, a taxpayer will have to pay penal interest of 1 per cent per month on the amount of unpaid tax till the date of payment of taxes.
4. If someone willfully doesn't pay tax even after getting notice u/s 142 and 148 of the Income Tax Act, then he/she may face prosecution u/s 276CC of the Act.
5. One cannot carry forward the losses to get it adjusted against profits/gains of future years.
However, if your income is below taxable limit then you won't have to pay it even if you file after the deadline. Currently, the basic exemption limit for resident individuals below the age of 60 years is Rs 2.5 lakh. For people between 60-80 years, income up to Rs 3 lakh is exempted from tax. For super senior citizens i.e. of age 80 years and above, the basic exemption limit is up to Rs 5 lakh.