ITR Filing 2025: Penalty for Late Filing of Income Tax Return (ITR) AY 2025-26 Explained

Filing your Income Tax Return (ITR) on time is crucial to avoid penalties under the Income Tax Act. For Assessment Year (AY) 2025-26, the deadlines and charges have been specified, and missing them may lead to financial burdens, including late fees and interest payments.

Late Filing Penalty and Interest Structure for AY 2025-26

The original due date for individuals (non-audited) was July 31, 2025, extended to September 15, 2025. Missing this date invites penalties under Section 234F. Taxpayers with income exceeding ₹5,00,000 will be charged ₹5,000 as a late fee, while those with income below ₹5,00,000 will pay ₹1,000.

In addition to the flat fee, unpaid tax attracts an interest of 1% per month or part thereof under Section 234A. Interest is calculated from the due date until the actual date of filing.

Impact of Missing ITR Filing Deadlines

Failure to file within the extended deadline results in loss of crucial tax benefits. The carry forward of losses such as business or capital losses is disallowed. Refund processing may also be delayed, and scrutiny chances increase.

Penalty for Belated and Revised Returns

ITRs filed after the due date and before December 31, 2025 are categorised as belated returns. These are subject to the aforementioned penalties. Beyond December 31, 2025, special approval is mandatory for filing.

Read More: ITR Filing Deadline Nears: 10-Point Checklist Before Sept 15!

Section-wise Breakdown of Other Penalties

Section 234B imposes 1% monthly interest for non-payment/underpayment of advance tax (liability exceeding ₹10,000). Section 234C adds interest for delaying instalments of advance tax during the year. TDS/TCS return delays attract penalties under Section 271H, ranging from ₹10,000 to ₹1,00,000.

Business Entities and Special Taxpayer Categories

Private limited companies face a flat ₹10,000 penalty under Section 234F and a ₹5,000 daily penalty under Section 271F. Similar rules apply to partnership firms and trusts, with additional audit-related penalties. Charitable and religious trusts must file ITR-7 before deadlines to retain exemptions.

Conclusion

Late filing of your ITR for AY 2025-26 can attract a financial penalty of up to ₹10,000, with additional interest on unpaid tax and loss of benefits. Filing within the deadline ensures smoother processing and avoids unnecessary hassles.

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Investments in securities are subject to market risks. Read all related documents carefully before investing.