Missing the initial deadline to file your Income Tax Return (ITR) for the fiscal year 2022-23 (Assessment Year 2023-24), which was July 31, 2023, need not cause undue concern. You can still submit your ITR after the original deadline by paying a penalty. This delayed filing is referred to as a "belated ITR." The last date for filing a belated ITR for FY 2022-23 is December 31, 2023.
When opting for a belated ITR, there's a penalty involved. If your net taxable income exceeds Rs 5 lakh, the penalty is Rs 5,000. For those with net taxable income below Rs 5 lakh, the penalty is Rs 1,000. Additionally, if you owe any income tax, you'll also need to pay penal interest on the amount.
Filing a belated ITR follows a similar process as filing the original ITR, but there are some distinctions. However, if you intend to switch your tax regime (moving from the one you selected in the previous year) while submitting a belated ITR, the procedure is influenced by your source of income. For example, consider a scenario where someone who filed their ITR under the old tax regime for FY 2021-22 wishes to file a belated ITR for FY 2022-23 under the new tax regime. Is this possible for salaried individuals?
If an individual's income for FY 2022-23 stems from sources such as salary, house property, or other non-business-related avenues, and they missed the original ITR deadline, they won't be able to switch to the new tax regime. The only way to do so would have been by filing the original ITR by July 31, 2023.
However, those with business or professional income have the option to switch in or out of the new tax regime by submitting Form 10-IE. The choice must be communicated to the income tax department. The decision to opt for the new regime for FY 2022-23 needs to be made by filing Form 10-IE by the due date for the original return under section 139(1). This choice is then applicable to either the original ITR or a belated ITR.
Once Form 10-IE is filed, it remains effective for subsequent years, unless another Form 10-IE is submitted to reverse the decision. If an individual filed Form 10-IE in FY 2021-22 within the original ITR due date to choose the new tax regime, they can continue to file ITR in the new regime for FY 2022-23.
The ITR deadline is July 31, 2023, for individuals not needing income tax audit. For those requiring audit, the deadline is October 31, 2023. It's important to note that switching tax regimes is a one-time opportunity for businesspersons and professionals. They can switch back to the old tax regime, but only once. This applies to FY 2022-23, as the rules have changed from FY 2023-24 onwards.
Transitioning from the new tax regime back to the old tax regime in a belated ITR might not be straightforward in all cases. The Income Tax Act specifies that to shift from the old regime to the new regime, Form 10-IE must be filed before the ITR deadline. However, the rules regarding the reverse process—shifting from the new regime to the old regime—are less clear. While the Income Tax Act allows withdrawal from the new regime, it doesn't specify a time limit for opting out. Therefore, it seems possible to exercise this option in an original, revised, or belated return by submitting Form 10-IE before filing the ITR. Nevertheless, there might be instances where the tax department raises objections or sends notices if Form 10-IE is submitted after the original ITR due date.
The author is a Chartered Accountant with 2 decades of experience into Accounting, Taxation, Auditing, Risk & Compliance, Credit Controls, Due diligence. Currently, the author is the founder and managing partner at RRL Global Services.
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