The deadline for filing income tax return (ITR) for the tax year 2023-24 is July 31. It is a known fact but what most taxpayers do not know is that the deadline is most likely not going to be extended. If you remember, a similar situation arose last year. A large number of taxpayers were hoping that the deadline would be extended as a convention.

But at the last minute they were unpleasantly surprised that the deadline would NOT be extended.

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The situation this time is not so special. Although there is talk and some demand that the deadline for filing income tax returns may (or should) be extended, it is perhaps as unlikely and uncertain as reversing the revision of the capital gains tax provision.

Let’s take a look at what you could lose if you don’t file your income tax return by July 31.

1. Loss of exemptions in the old tax system: If you miss the 31 July deadline, you will not be able to file your return after this date under the old tax regime, because for the 2023-24 tax year, the new tax regime is the standard regime. This effectively means that you will not be able to claim exemptions and deductions for investments in tax-saving instruments.

After the July 31 deadline, taxpayers will no longer be able to claim these benefits as they will transition to the new tax system where these benefits will no longer apply.

Chartered Accountant explained this in an X post, saying: “Missing the deadline could result in the loss of benefits associated with the old tax regime, as taxpayers will be automatically transferred to the new tax regime, which is the default option. This shift could make the situation more expensive, as taxpayers who preferred the old tax regime because of the deductions and exemptions will find that the new regime does not offer these benefits and may have to pay higher taxes with interest.”

“For salaried taxpayers without business income, who have opted for the old tax regime, the ITR has to be filed before the due date. Otherwise, they cannot opt ​​out of the standard new tax regime,” says Chartered Accountant Pratibha Goyal, partner at PD Gupta & Company, a Delhi-based firm.

2. Penalty for late submission: Because we know that missing the July 31 deadline for filing ITR means the income tax authorities will impose a penalty for late filing of ₹5,000 under Section 234F of the Income Tax (IT) Act. However, the late filing fee is reduced to ₹1,000 if your income is less than ₹5 lakh.

In addition, in case of any tax debt, taxpayers will have to pay interest at the rate of 1 percent per month on the outstanding tax amount from the due date, as per Section 234A of the Income Tax Act.

3. No transfer of losses: If taxpayers incur losses due to their investments in the stock market, in mutual funds, in real estate or in one of their businesses, they have the option to carry forward these losses and offset them against their income in subsequent years.

This provision significantly reduces your tax liability in future years. However, this is not allowed if you file your return after the deadline.

“You are not allowed to carry forward these losses if you do not file your ITR before the deadline,” adds accountant Chauhan.