Taxpayers who missed the original deadline to file their Income Tax Return (ITR) still have a limited window to comply with the law. The option to file a Belated Return is available under the Income Tax Act, but it comes with penalties, interest charges, and loss of certain tax benefits. With only a few days left before the final cutoff, it is important to understand how belated ITR filing works, how much penalty you may have to pay, and what disadvantages it carries.
The provision for filing a belated return is covered under Section 139(4) of the Income Tax Act. According to this section, if a taxpayer fails to file their ITR by the prescribed due date, they are allowed to submit a belated return within a specified extended period.
For the current assessment year, the last date to file a belated ITR is December 31, 2025. Normally, the due date for filing an income tax return is July 31. However, this year the deadline was extended to September 16, 2025. Taxpayers who still could not meet this extended deadline can use the belated return option, but only until December 31.
The Income Tax Department introduced the belated return facility to provide relief to taxpayers who miss the deadline due to unavoidable reasons such as medical emergencies, documentation issues, or lack of information. This option ensures that taxpayers still get an opportunity to comply with tax laws and avoid more serious consequences like notices or prosecution.
However, experts advise that belated return filing should be used only as a last resort, as it leads to financial penalties and restricts several tax advantages.
One of the biggest drawbacks of filing a belated return is the penalty under Section 234F. The penalty amount depends on the taxpayer’s gross total income:
If gross total income is up to ₹5 lakh:
A penalty of ₹1,000 is applicable.
If gross total income exceeds ₹5 lakh:
A penalty of ₹5,000 has to be paid.
In addition to the penalty, taxpayers must also pay interest at the rate of 1% per month on the outstanding tax amount. This interest is calculated from the original due date of filing the return until the actual date of filing the belated return.
While belated returns allow delayed compliance, they come with several important limitations:
If a taxpayer has incurred business loss or capital loss, these losses cannot be carried forward to future years when filing a belated return. This can significantly impact tax planning for investors and business owners.
However, loss from house property is an exception and can still be carried forward even if the return is belated.
Another major drawback is related to the tax regime selection. Individual taxpayers filing a belated return cannot opt for the old tax regime, which allows deductions and exemptions such as HRA, 80C, and 80D.
In such cases, the return must be filed only under the new tax regime, which may result in higher tax liability for many taxpayers.
The combination of penalty and interest can increase the overall tax outgo, especially for those with unpaid tax dues. Filing early helps reduce interest accumulation.
Taxpayers with business income, capital market investments, or those planning to carry forward losses should make every effort to file their return within the original deadline. Filing a belated return may reduce future tax-saving opportunities and affect long-term financial planning.
With December 31, 2025, approaching fast, taxpayers who missed the ITR deadline should act immediately. While the belated return option under Section 139(4) offers a second chance, it comes at a cost—both financially and in terms of lost tax benefits.
To avoid penalties, interest, and restrictions on deductions or loss carry forward, experts strongly recommend filing returns on time whenever possible. If you are yet to file your ITR, completing the process before the belated deadline can help you stay compliant and avoid further complications from the Income Tax Department.
