Penalty under section 234F late filling of Income tax return



From which date the provisions of penalty under section 234F shall be effective?

The provisions of penalty under section 234F shall be applicable from 1 April 2018 i.e. in respect of Income Tax returns to be filed for FY 2017-18 (or AY 2018-19). In simple words, if we file the income tax return of F.Y 17-18 after 31st August 2018 then fees u/s 234F shall become operative. Financial year 17-18 would be the first year when any such fees would be leviable without the intervention of Assessing Officer.
What was the reason for the introduction of penalty as per Section 234F?

In view of improving tax compliance, it is important that the income tax returns are filed within the due dates specified in section 139(1). Therefore, section 234F has been inserted in the Income Tax Act. Further, the reduced time limits proposed for the making of an assessment under various sections are also based on pre-requisite that returns are filed on time.
How to pay 234F Fees?

As per Finance Act 2017, Late fees under section 234F can be paid by the way of Self Assessment Tax u/s 140A. Therefore, through Challan 280, under the head of Self Assessment Tax, this penalty can be paid from FY 17-18 and onwards.
Under which section shall the fees under section 234F will be paid if you have missed the deadline for filing ITR?

The fees u/s 234F shall be payable under section 140A (Self Assessment Tax). A consequential amendment has been made in section 140A. to include that in case of delay in furnishing of return of income, along with the tax and interest payable, the fee for delay in furnishing of return of income shall also be payable.
What was the penalty before section 234F was introduced?

Before the introduction of sec 234F, the penalty for failure to furnish the return of income was leviable under section 271F.
As per this section, if the income tax return was not filed before the end of relevant assessment year then Assessing Officer, at its discretion may levy a penalty amounting to Rs. 5,000/- However, this section has been withdrawn from the assessment year 2018-19 and onwards after coming of penalty under section 234F into force.
How to avoid paying the fees under section 234F to the Income Tax Department?

In order to avoid payment of late fee u/s 234F, one needs to file the income tax return on time in respect of every assessment year :-) 

Can the late fees u/s 234F be waived of in the genuine cases?

No, fees u/s 234F is mandatorily applicable, therefore, it cannot be waived off by income tax authority.

Can excess TDS deducted be adjusted from the fees u/s 234F?

Yes, the income tax department will adjust the excess TDS deducted which you would have received by the way of refund in the payment of Fees under section 234F.

Will the impact of amendment under section 234F come on the intimation under section 143(1)?

A consequential amendment in section 143(1) has been done in consonance with the introduction of sec 234F. Now, the fee payable under section 234F would also be considered in the computation of amount payable or refund due, as the case may be, on account of processing of the return.

Is 234F a fee or a penalty?

According to the Income Tax Act, the amount payable under sec 234F is termed as late fees. But it has been observed that in common parlance, many of us are designating the amount under sec 234F as the penalty instead of fees, which is not the case. The reason being that, this fee is steeper in nature in which the assessing officer has no role in deciding its applicability. It automatically applies immediately after the due date.

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