Last updated: February 26th, 2020 10:20 AM

Section 234F - Income Tax - Late Filing Penalty

Filing belated income tax returns or failure to file income tax returns attracts a penalty under the Income Tax Act. The penalty for late filing of income tax return stands increased with effect from 1st April 2018, as per Section 234F of the Income Tax Act. In this article, we provide a brief overview of Section 234F of the Income Tax Act.

Section 234F

The newly inserted Section 234F is reproduced below for reference:

"234F. Fees for default in furnishing return of income.—(1) Without prejudice to the provisions of this Act, where a person 
required to furnish a return of income under section 139, fails to do so within the time prescribed 
in sub-section (1) of said section, he shall pay, by way of fee, a sum of—
(a) five thousand rupees, if the return is furnished on or before the 31st day of December of the assessment year;
(b) ten thousand rupees in any other case:
Provided that if the total income of the person does not exceed five lakh rupees, the fee payable under this section 
shall not exceed one thousand rupees.
(2) The provisions of this section shall apply in respect of return of income required to be furnished 
for the assessment year commencing on or after the 1st day of April 2018.".

Penalty for Late Filing Income Tax Return - With effect from 1st April 2018

As per Section 234F of the Income Tax Act, from 1st April 2018, the penalty for late filing income tax return would be as follows:

Late Filing Between 1st August to 31st December

A penalty of Rs.5000 will be applicable if an income tax return due on 31st July is filed late between the due date and 31st December of the assessment year.

Late Filing After 31st December

A penalty of Rs.10,000 will be applicable if an income tax return due on 31st July is filed late after 31st December of the assessment year.

Reduction in Penalty

If the assessment of the taxpayer reflects a total income of Rs.5 lakh rupees or less, the maximum penalty for late filing of income tax return has been capped at Rs.1000 under Section 234F.

Penalty for Late Filing Income Tax Return - Before 1st April 2018

Under the old provisions applicable for income tax returns filed up to FY 2016-17, taxpayers who late file their income tax return could be subject to a penalty of Rs.5000. However, the penalty of Rs.5000 for late filing of income tax return is not automatically levied. In case an Income Tax Officer issues a notice for late filing of income tax return, the taxpayer would have to pay the penalty of Rs.5000. Hence, the penalty for late filing of income tax return is solely based on the discretion of the assessing officer.