What happens if taxpayers miss the September 15 ITR deadline? What penalties may they face?

Taxpayers who have not yet submitted their Income Tax Return (ITR) must complete the filing by the specified deadlines. Non-audit cases can be filed until September 15, 2025. Audit cases must be filed by October 31, 2025, and transfer pricing taxpayers are required to file by November 30, 2025.

“Failure to file on or before the timelines prescribed could leave taxpayers liable for late fees up to ₹5,000 and interest on any outstanding tax, as well as penalties on various provisions of law. A likely wilful default could lead to prosecution and imprisonment,” said Gaurav Jain, Partner, Direct Tax, Forvis Mazars India.

Furthermore, the opportunity to carry forward losses would be lost. Thus, timely filing can save taxpayers from these financial or legal consequences.

To understand the details, the following consequences would be applicable if you do not file your ITR today.

 Late filing fee (Section 234F): If the return is not filed within the prescribed due date (i.e. 15th September 2025 for AY 2025-26), a late fee of up to ₹5,000 may be levied. For taxpayers with a total income below ₹5 lakh, the maximum fee is ₹1,000.

Interest under Sections 234A: Taxpayers would be liable to pay simple interest u/s 234A of the IT Act at the rate of 1% for each month or part of a month, starting from the day after the due date until the actual date of filing the return; or if no return has been filed, ending on the date of the completion of the best judgement assessment by the revenue authorities u/s 144 of the IT Act.

Loss of benefits: Taxpayers may forfeit certain deductions and/or the ability to set off and carry forward losses (excluding house property losses) if they file the return after the due date specified under s. 139(1) of the IT Act.

Penalty for Concealment or Misreporting (Section 270A): In case the taxpayer has taxable income and the taxpayer fails to file his return of income, then there are enabling provisions to levy a penalty u/s 270A equivalent to 50% of the tax which may have been avoided by the taxpayer by way of such non-filing of ITR,” says CA (Dr.) Suresh Surana.

 Prosecution (Section 276CC): Further, the Income Tax authority has the power to initiate prosecution u/s 276CC of the IT Act in case of a defaulting taxpayer who would be subjected to rigorous imprisonment for a term which shall not be less than 3 months, but which may extend to 2 years, along with a fine. “Also, in case the tax likely to have been evaded exceeds ₹25,00,000, had such failure of non-furnishing of return not been discovered, the term of imprisonment may range from 6 months to 7 years along with a fine. However, no such prosecution can be initiated where the tax sought to be evaded is upto ₹10,000 or an updated return is filed u/s 139(8A) of the IT Act,” said Surana.