Penalty for Late Filing of ITR AY 2026-27
For Assessment Year (AY) 2026-27 (Financial Year 2025-26), the penalty for late filing of Income Tax Return (ITR) is primarily governed by a fixed late fee and monthly interest on any unpaid tax.
Fixed Late Filing Fee (Section 234F)
The amount you must pay depends on your total taxable income:
- Income > ₹5 Lakh: A flat fee of ₹5,000 applies if filed after the due date (e.g., 31 July 2026 for salaried employee).
- Income ≤ ₹5 Lakh: The fee is restricted to ₹1,000.
- Income below Exemption Limit: No fee is charged if your total income is below the basic taxable threshold (typically ₹4 lakh in the new regime).
Interest on Unpaid Tax (Section 234A)
In addition to the fixed fee, if you have outstanding tax dues:
- Interest Rate: Simple interest at 1% per month (or part of a month).
- Calculation Period: Starts from the day immediately following the original due date until the actual date of filing.
- Net Liability: Interest is only charged on the balance tax payable after adjusting for TDS, TCS, and Advance Tax already paid.
Other Financial Consequences
- No Loss Carry-Forward: You cannot carry forward business or capital losses (except house property losses) to future years if you file late.
- Delayed Refunds: Processing of any refund due to you will be delayed until the belated return is verified.
- ITR-U (Updated Return): If you miss the final belated filing deadline of 31 December 2026, you can file an Updated Return (ITR-U) until 31 March 2031, but this involves an additional tax penalty of 25% to 70% on your total tax and interest liability.