Late ITR? Daily Penalty Has a ₹100/Day Cap

A tax tribunal has ruled that penalties for not filing ITR on time cannot go on forever. There is a legal limit. Here is what late filers need to know to protect themselves from runaway penalty demands.

Here's what happened: The Raipur ITAT ruled that the ₹100/day penalty for non-filing of ITR under Section 272A(2)(e) must stop accruing once the belated return window under Section 139(4) closes.. Section 139(4) allows taxpayers to file a belated ITR until December 31 of the relevant assessment year — this date now acts as the penalty cutoff.. This ruling protects taxpayers from disproportionate penalty demands that stretched well beyond the period they were legally able to file their return..

What you should do: Check any outstanding penalty notice you have received — verify whether the department has calculated ₹100/day charges beyond December 31 of the assessment year in question.. If your penalty demand exceeds the belated-filing window period, file a written objection citing Section 139(4) and reference this ITAT ruling in your response.. File your ITR before July 31 every year to avoid the penalty entirely — even a belated filing by December 31 limits your exposure compared to never filing at all..

Even if you missed the July 31 deadline, filing a belated ITR before December 31 stops the penalty clock and keeps your refund and loan-eligibility documents intact.