Section 139 (4) of Income Tax Act

If a taxpayer misses the due date for filing an Income Tax Return, Section 139(4) allows for a Belated Return to be submitted either three months before the end of the relevant assessment year or before the assessment's completion, whichever comes first.
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Section 139 (4) of Income Tax Act
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3 min
27-August-2024
Section 139(4) of the Income Tax Act pertains to the filing of belated income tax returns. Specifically, it allows taxpayers who have missed the original deadline to file their income tax returns (ITR) to do so at a later date, provided they adhere to the extended timelines specified by the law. This section is crucial for ensuring compliance and avoiding penalties for those who, for various reasons, could not submit their returns on time.

In this article, we will talk about the latest updates for Section 139(4) in 2024, exploring the revised deadlines and penalties associated with belated returns. We'll discuss the implications of these changes for taxpayers, how they can impact financial planning, and the steps one should take to ensure compliance.

What do you mean by belated return?

A belated return is an income tax return filed after the due date, typically July 31 for individuals not subject to audits. If an individual misses this deadline but submits their return before December 31 of the assessment year, it is classified as a belated return. For individuals who are subject to tax audits, the deadline is September 30, and any return filed after this date is also considered belated. Belated returns fall under Section 139(4) of the Income Tax Act, which permits filing beyond the original deadline to ensure compliance and avoid penalties.

Filing ITR for previous year

When you miss the original deadline for filing your income tax return (ITR), you still have an option to file a belated return under Section 139(4) of the Income Tax Act. The belated return can be submitted up to December 31 of the assessment year or before the completion of the assessment, whichever comes earlier. This provision is available to all taxpayers, including individuals, businesses, and professionals who failed to file their ITR by the due date. It's important to note that if the belated return is filed after the original due date, it may attract penalties and additional interest, which can affect your financial situation. Proper adherence to the revised deadlines and understanding the implications of late filing are crucial for maintaining compliance and avoiding unnecessary penalties.

Drawbacks of filing late return

  • Interest penalty under section 234A: Simple interest of 1% per month or part thereof on the unpaid tax amount from the due date until the actual filing date.
  • Late filing fees under section 234F: Penalty of up to Rs. 5,000, depending on the taxable income, with a reduced penalty for income below Rs. 5 Lakh.
  • Disallowed deductions/exemptions: Certain tax-saving deductions and exemptions under sections such as 80-IA and 80-IB may be disallowed.
  • Ineligibility to carry forward losses: Business and capital losses cannot be carried forward if the return is filed late, except for losses from house property.

How to file belated returns?

Online method

  • Log in to your account: Begin by logging into your account on the Income Tax e-filing portal.
  • Navigate to e-file: Click on ‘e-File,’ then choose ‘Income Tax Returns,’ and select ‘File Income Tax Return.’
  • Select relevant assessment year: Choose the assessment year for which you are filing the belated return.
  • Mode of filing: If filing online, continue with the next steps. For offline filing, refer to the offline method.
  • Start new filing: Click on ‘Start new filing’ to begin the process.
  • Select taxpayer status: Choose the applicable taxpayer status based on your profile.
  • Choose ITR form: Select the appropriate ITR form according to your income sources.
  • Verify personal information: Ensure all personal details are accurate in the ‘Personal Information’ section.
  • Filing section and 139(4): In the filing section, select option 139(4) for belated returns.
  • Income details and tax payments: Enter income details and make necessary tax payments.

Offline method

  • Download the offline ITR preparation utility: Obtain the utility from the Income Tax Department’s website.
  • Utilise the utility: Use the utility to prepare your ITR offline, ensuring all details are correctly filled.
  • Upload and verify: Upload the generated .json file to the Income Tax e-filing portal and proceed to verification.
By following these steps, you can effectively file your belated return, ensuring compliance with the latest tax regulations.

Who can file belated return under section 139(4)?

  • Taxable income exceeding threshold: Individuals whose income exceeds the prescribed limit for filing tax returns, even if taxes are fully deducted through TDS, must file their returns.
  • Salaried individuals: Employees with taxable income surpassing the exemption limit, regardless of TDS, are required to file a belated return if they missed the original deadline.
  • Signatories of foreign accounts: Persons with signing authority in foreign accounts must file their returns if they fail to meet the original deadline.
  • Audit subjects: Individuals and businesses subject to tax audits due to high turnover or gross receipts must file belated returns if they miss the original deadline.
  • High-value transactions: Taxpayers who deposited more than Rs. 1 Crore in a cooperative or regular bank account, or spent over Rs. 2 Lakhs on foreign travel, need to file belated returns if they missed the due date.
  • Large electricity bills: Individuals with an electricity bill exceeding Rs. 1 Lakh must file their returns under Section 139(4) if they missed the deadline.
  • NRIs with Indian income: Non-resident Indians (NRIs) with income sourced in India or deemed received in India must file belated returns if they missed the original deadline.

Interest penalty under section 234A

Interest penalty details

  • Rate of interest: A penalty of 1% simple interest per month or part thereof is levied under Section 234A.
  • Calculation period: Interest is calculated from the due date of filing the return until the actual date of filing. This increases with each passing month, leading to higher penalties for delayed submissions.

Late filing fees under section 234F

Late filing fees details

  • Penalty amount: Under Section 234F, a maximum late filing fee of Rs. 5,000 is imposed.
  • Income thresholds: If taxable income exceeds Rs. 5 Lakh, the fee is Rs. 5,000. For income below Rs. 5 Lakh, the fee is Rs. 1,000. No penalty is charged if income is below Rs. 2.5 Lakh.

What are the other consequences of filing a belated return?

Filing a belated return can have several negative consequences. Besides incurring penalties and interest, certain tax benefits and deductions become unavailable. Deductions under sections such as 80-IA, 80-IB, and 80-IE are disallowed if the return is filed late. Furthermore, business and capital losses cannot be carried forward for future offset, although losses from house property are an exception. Legal action may also be taken by the Income Tax Department, including penalties or prosecution in severe cases.

Explore these essential articles on income tax for comprehensive insights

Guidelines for filing missed returns for previous financial years

If you missed filing your income tax return by the original deadline, you can still rectify the situation by filing a belated return. The last date for this is typically December 31 of the assessment year. If you miss this deadline as well, you may request a condonation of delay from the Income Tax Commissioner or the prescribed authority, explaining the reasons for the delay.

1. Condonation of delay request

To request condonation of delay, you must formally apply to the Income Tax Commissioner, explaining why you missed the original deadline. The authority will evaluate your request based on the validity and genuineness of the reasons provided. Factors such as genuine hardship, eligibility for a tax refund under the income tax slabs, and whether another person could assess the tax are considered. If your request is accepted, you will be allowed to file your return beyond the regular deadline.

2. Tax payment and interest

Regardless of whether you can file a belated return, you must pay any outstanding tax along with applicable interest under Sections 234A, 234B, or 234C. These sections impose interest for delayed payment of taxes and can significantly increase your financial liability if not addressed promptly. Ensure all taxes are paid to avoid further complications and additional interest.

3. Penalties and notices

If your taxes were paid on time but the return was not filed, you may face a penalty under Section 271F. This can be up to Rs. 5,000. Additionally, you should promptly respond to any notices from the Income Tax Department through the e-filing portal to avoid escalating issues.

4. Legal consequences

Failure to file returns can result in serious legal consequences, including penalties and notices from the Income Tax Department. In severe cases, prosecution may be pursued, which could lead to imprisonment for up to seven years. Ensuring timely compliance with tax regulations helps avoid such legal troubles.

5. Under-reported income

If your belated return includes under-reported income, you may face a penalty of up to 200% of the unpaid tax. However, if you have paid the taxes with interest after the deadline but under-reported income, the assessing officer might consider waiving the penalty. It’s crucial to accurately report all income to avoid significant penalties.

Conclusion

Filing a belated return is an opportunity to rectify missed deadlines, but it comes with its challenges. To avoid penalties and legal issues, it’s advisable to file returns by the original due date. If you find yourself needing to file a belated return, act promptly to handle tax payments, address any notices, and consider requesting a condonation of delay if necessary. Adhering to these guidelines will help you stay compliant and minimise potential repercussions.

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Frequently asked questions

What is the penalty for 139 4 of Income Tax Act?
Under Section 139(4), if you file a belated return after the deadline, a penalty of up to Rs. 5,000 may be imposed. This penalty is applicable if the return is filed after the end of the relevant assessment year.

What is the difference between filing 139 1 and 139 4?
Section 139(1) is for timely filing of returns by the original due date, while Section 139(4) allows for belated return filing after the original deadline has passed. Section 139(4) is used if you missed the initial due date and want to file your return later.

How to select 139 4 in income tax return?
To file a belated return under Section 139(4), select the relevant taxpayer status and choose Section 139(4) as the type of return. Ensure all personal and income details are accurate before submission.

Who can file a belated return under Section 139(4)?
Any taxpayer who has missed the original filing deadline can file a belated return under Section 139(4). This option is available if the return was not filed within the due date and is being filed before the end of the assessment year.

What is the deadline for filing a belated return under Section 139(4)?
The deadline for filing a belated return under Section 139(4) is December 31 of the relevant assessment year. If this deadline is missed, you may request a condonation of delay from the Income Tax Commissioner.

Are there any penalties for filing a belated return under Section 139(4)?
Yes, penalties may be imposed for filing a belated return under Section 139(4). The maximum penalty is Rs. 5,000 if the return is filed after the end of the assessment year. This penalty applies if no genuine hardship is proven.

Can a belated return be revised?
Yes, a belated return can be revised. Since FY 2016-17, taxpayers can revise belated returns if corrections or updates are needed. This allows for accurate tax reporting even after the original filing deadline.

What documents are needed to file a belated return?
To file a belated return, you will need documents like income statements (Form 16/16A), bank statements, proof of deductions, and tax payment receipts. These documents help ensure accurate and complete filing.

Is there any difference in the process of filing an original and a belated return?
Yes, the primary difference is the selection of Section 139(4) for belated returns, while original returns use Section 139(1). The process involves the same steps but with different deadlines and potential penalties for belated filings.

Will I get a refund if I file a belated return?
Yes, you may receive a refund if your belated return shows excess tax payment. However, ensure that all required taxes and interest are paid to avoid any delays in processing your refund.

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