Section 234F

The saying “Better late than never” while can be applied to many situations in life, it becomes tricky when filing or not filing your income tax returns (ITR).

Most of us have a habit of putting off the tax filing work unless it becomes absolutely necessary. For us missing the tax filing deadline only means filing a late return.

In this post, we have covered each and every aspect of Section 234F.

What is section 234F?

The government introduced Section 234F in Budget 2017 to ensure timely filing of income tax returns.

As per Section 234F, if a person is required to file an income tax return (ITR) as per Section 139(1) but does not file it within the due date then he/she has to pay a late fee while filing his ITR. The late fee depends upon his/her time of filing the return and his/her total income.

To improve tax compliance, the returns should be filed within the due dates as per Section 139(1). The time limits to make assessments under various other sections are only based on timely filing of the tax return.

It is applicable for Tax returns filed for FY 2017-18 (or AY 2018-19). Hence, if we file the return of FY 17-18 after 31st July 2018 then fees u/s 234F will become operative.

FY 17-18 would be the first year when any such fees would be leviable without the intervention of Assessing Officer.

When to file an Income Tax Return?

A person has to mandatorily file their income tax return if:

  • The gross total income (before any deductions under Section 80C to 80U) is over basic tax exemption limit i.e. Rs.2,50,000 (for persons below 60 years) or Rs. 3,00,000 (for persons of 60 years and above but less than 80 years) or Rs. 5,00,000 (for persons of 80 years and above).
  • The person has any asset including financial interest in any entity located outside India or has signing authority in any account located outside India as a beneficial owner or otherwise.
  • When the person is a beneficiary of any asset which is located outside India.

Due Dates for filing ITR u/s 139(1)

The due date of filing tax returns for FY 2018-19 (Assessment Year 2019-20) is 31/07/2019 (extended to 31/08/2019) for taxpayers not liable to audit.

The due dates for filing ITR for different category of taxpayers are:

Category Due date of filing
Individuals who are not required to be audited 31st July
Company or Individual whose accounts are required to be audited 30th September
Individual who is required to furnish report referred in section 92E 30th November

Who is covered under the scope of 234F?

  • Individual
  • HUF
  • Company
  • Firm
  • AOP etc.

These entities need to pay late filing fees if the return is filed after the due dates.

Amount of fees levied under 234F

The late fees that can be levied u/s 234F are if :

  • The return is done after 31st July but on or before the 31st day of December of the assessment year – Rs. 5000. In other words, between 31st July 2018 and 31st Dec 2018 for FY 2017-18.
  • The return is done after 31st December of the assessment year – Rs. 10,000.

However, if the Total income (income after deduction) is less than or equal to five lakh rupees, then, the fee amount will not be over Rs. 1000.

Let us look into the applicability of the late fee as per Section 234 F on different income.

Total Income Return Filing Date Fees u/s 234F
Rs. 3,00,000 5th July 2018 Not Applicable
Rs. 6,00,000 31st July 2018 Not Applicable
Rs. 10,00,000 25th July 2018 Not Applicable
Rs. 25,00,000 10th August 2018 Rs. 5000
Rs. 4,00,000 10th January 2019 Rs. 1000
Rs. 9,00,000 15th October 2018 Rs. 5000
Rs. 4,50,000 13th November 2018 Rs. 1000
Rs. 18,00,000 15th February 2019 Rs. 10000

Section 234F applicability

How to pay late fees as per Section 234F?

As per Finance Act, 2017 late fees can be paid by the way of Self Assessment Tax (SAT) u/s 140A.

The late fees are also payable under Section 140A (SAT). An amendment was also made in Section 140A.

A person can also visit the NSDL website to get Challan ITNS 280 to pay the late fees from FY 17-18 and onwards.

In case of delay to submit an income tax return, along with with the payable tax and interest, the fee for delay in furnishing of an income tax return is also payable.

Thus, it is recommended to salaried individual complete the tax return filing as soon as they receive the salary (Form 16).

Penalty before the introduction of Section 234F

The penalty for not filing income tax returns before the introduction of Section 234F was under Section 271F.

In Section 271F, if the return is not filed before the end of the assessment year then Assessing Officer, may levy a penalty up to Rs. 5,000/-.

However, Section 234F was introduced, it is withdrawn from the assessment year 2018-19.

Q &A

Q 1. Can the excess TDS deducted can be adjusted from the late fee payment as per Section 234F?

A. Yes, the income tax department will adjust the excess TDS deducted towards the payment of Fees u/s 234F.

Q 2. Is Section 234F a fee or a penalty?

A. As per ITA, the amount payable under Section 234F is late fees. But many consider this as a penalty instead of fees. The reason being that this fee is steeper in nature and the assessing officer has no role in deciding its applicability. It automatically applies immediately after the due date.

Section 234F summary, 234f, IT 234f

That brings us to the end of this post. Please comment below and let us know what you think and if you have any questions.

Related: Which ITR should you file?