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Section 234F - Fee (Penalty) for delay in filing Income-tax return

1. What is Section 234F?

With reference to Section 234F of Income Tax Act, if it is mandatory for an individual/entity to file Income Tax Return (ITR forms i.e. ITR-1,2,3,4,5,6,7) as per the provisions of Income Tax Law [section 139(1)] but does not file it within the prescribed time limit, then late fee gets attracted which needs to be deposited by the individual while filing the ITR form. The quantum of fees shall depend upon the time of filing the return and the total income.

2. Is Section 234F a fee or a penalty?

According to the Income Tax Act 1961, the amount payable under Section 234F is termed as late fees. Despite it being stated as a fee, quite a lot of us regard it as a penalty, this is not the scenario. The reason being that, the fee is steep in nature in which the assessing officer has no role in deciding its applicability. It automatically applies immediately after the due date. It cannot be waived, it is mandatory.

Earlier penalty for delay (Section 271F, upto Rs. 5000) in filing of return was levied at the discretion of Assessing Officer. But now, the same is payable before filing of Income-tax return. Section 271F has been eradicated after the introduction of Section 234F.

3. Who are covered under the scope of 234F?

Every entity comprising of Individual, HUF, Company, Firm, AOP etc. will be covered under the scope of Section 234F of Income Tax Act 1961 and will be liable to pay late filing fees, if the Income Tax Return is filed after their respective due dates.

4. From which date the provisions under section 234F shall be brought into effect?

The provisions of penalty under section 234F shall be applicable from 1 April 2018 i.e. in respect of Income Tax returns to be filed for F.Y 2017-18 (or A.Y 2018-19). F.Y 2017-18 would be the first year where any penalty would be leviable without the intervention of Assessing Officer.

5. What was the main reason behind the introduction of Section 234F?

In view of improving tax compliance, it is important that the income tax returns are filed within the due dates specified in section 139(1). Therefore, section 234F has been inserted in the Income Tax Act. Further, the reduced time limits proposed for the making of an assessment under various sections are also based on pre-requisite that returns are filed on time.

6. What are the prescribed time limits(Due Dates) for filing ITR?
CategoryDue date of filing
Individuals who are not under the purview of Audit  31st August for F.Y 2017-18, 31st July for F.Y 2018-19 (subject to extension by the government)
Company or Individual whose accounts are required to be audited  31st October for FY 2017-18, 31st September for F.Y 2018-19 (subject to extension by the government)
Individual who is required to furnish report referred in section 92E(Transfer Pricing)  30th November for F.Y 2017-18, 30th September for F.Y 2018-19 (subject to extension by the government)
 

7. What is the amount (fees) leviable under Section 234F?

Total IncomeReturn filedFee (Penalty)
Exceeds Rs. 5 LakhOn or before 31st December of Assessment Year but after due dateRs. 5,000/-
Exceeds Rs. 5 LakhAfter 31st of December 2018Rs. 10,000/-
Upto Rs. 5 LakhAfter due date (31st August 2018)Rs. 1,000/-

 

8. How to Pay fees under section 234F?

As per the Finance Act 2017, Late fees under section 234F can be paid by the way of Self Assessment Tax u/s 140A. Therefore, through Challan 280, under the head of Self Assessment Tax, this fee can be paid from F.Y 2017-18 and onwards.

9. Can the refund  amount be adjusted from fees u/s 234F?

The income tax department will adjust the excess TDS deducted, which would be received by way of refund in the payment of Fees under section 234F. Thus, refund to be received = [Refund due to be received (excess TDS deducted) – Fees due u/s 234F]. It could amount to fees payable, if the fees payable exceeds the refund value to which it is being set off against.

 

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