Section 139(4) – Belated Return

While the Income Tax Act mandates the filing of an Income Tax Return (ITR) by specific due dates under Section 139(1), it also provides a provision for taxpayers who might miss this deadline. This provision is Section 139(4), which allows for the filing of a "Belated Return." Although it offers a second chance, filing a belated return comes with its own set of consequences and restrictions.

What is a Belated Return?

A "belated return" refers to an Income Tax Return filed after the original due date specified under Section 139(1) for the relevant assessment year. It serves as a compliance mechanism for taxpayers who could not submit their ITR within the initial stipulated time frame.

Time Limit for Filing a Belated Return

As per Section 139(4), a taxpayer can file a belated return:

• On or before the 31st day of December of the assessment year; OR
• Before the completion of the assessment,
• Whichever is earlier.

This means that for the Financial Year (FY) 2024-25, the Assessment Year (AY) is 2025-26. If the original due date (e.g., July 31, 2025, for individuals not requiring an audit) is missed, a belated return can generally be filed until December 31, 2025.

Consequences of Filing a Belated Return

While Section 139(4) provides a window to comply, it does so with certain disadvantages:

1. Mandatory Late Filing Fee (Section 234F):

A fee is mandatorily levied for filing a belated return:

• ₹5,000: If the return is filed after the original due date but on or before December 31st of the assessment year.
• ₹1,000: If the total income of the person does not exceed ₹5 lakh.

Example:

• Mr. A, with a total income of ₹10,00,000, files his ITR on October 15th, 2025 (original due date was July 31st, 2025). He will have to pay a late filing fee of ₹5,000.
• Ms. B, with a total income of ₹4,50,000, files her ITR on November 10th, 2025 (original due date was July 31st, 2025). She will have to pay a late filing fee of ₹1,000.

2. Interest on Unpaid Tax (Section 234A):

If there is any outstanding tax payable, interest at the rate of 1% per month or part of a month is charged on the unpaid tax amount. This interest accrues from the original due date of filing the return until the actual date of filing.

Example: If an individual had a tax liability of ₹20,000 and the original due date was July 31st, 2025, but they file on October 15th, 2025, they will be liable to pay interest for August, September, and October (3 months) at 1% per month on ₹20,000.

3. Inability to Carry Forward Certain Losses:

A significant disadvantage of filing a belated return is the restriction on carrying forward certain losses to future assessment years. This means you cannot offset these losses against future income to reduce your tax liability.

• Losses that CANNOT be carried forward: Business loss, capital loss.
• Losses that CAN be carried forward (Exceptions): Loss from house property and unabsorbed depreciation can still be carried forward even if the return is belated.

4. Loss of Certain Deductions/Exemptions:

Some deductions and exemptions might not be available if the return is filed belatedly. For instance, specific deductions available for donations, etc., may be disallowed if the return is not filed by the original due date.

5. Delayed Refunds:

If you are eligible for a tax refund, filing a belated return will delay the processing of your refund. Furthermore, you might lose interest on the refund amount that would have been payable under Section 244A if the return was filed on time.

6. Reduced Opportunity for Revision:

A belated return (Section 139(4)) can be revised under Section 139(5), but only up to December 31st of the assessment year or before the completion of the assessment, whichever is earlier. An original return has a broader window for revision.

Who Should File a Belated Return?

Any person who was required to file an ITR under Section 139(1) but missed the original due date should file a belated return. Even if your income is below the basic exemption limit, but you have significant TDS or TCS deducted, or wish to carry forward house property loss, filing a belated return is advisable to claim your refund or carry forward eligible losses.

How to File a Belated Return

The process for filing a belated return is similar to filing an original return. Taxpayers can utilize the Income Tax Department's e-filing portal. It is crucial to ensure that all due taxes, along with any applicable interest under Section 234A and late filing fees under Section 234F, are paid before or at the time of filing the belated return. Select the appropriate ITR form based on your income sources and taxpayer category.

Interplay with Other Sections

• Section 139(1): Defines the normal due dates for filing. A belated return is filed after this deadline.
• Section 139(5) (Revised Return): Allows for revision of an original or belated return. However, a belated return cannot be revised after December 31st of the assessment year.
• Section 139(8A) (Updated Return): For those who miss even the belated return deadline, the option of filing an Updated Return is available for up to 24 months from the end of the relevant assessment year, albeit with a higher penalty.
• Section 142(1): The Income Tax Department may issue a notice under this section to a person who has not filed their return within the due date, directing them to file it.