Missed ITR Filing Deadline? Here’s What Happens Under the New Tax Regime

Filing your income tax return (ITR) on time is critical—not only to avoid penalties but also to preserve the option to choose your preferred tax regime. Taxpayers who miss the deadline risk automatic shift to the new tax regime, even if they initially intended to claim exemptions under the old system.

The Income Tax Department emphasizes that, “The choice of old tax regime can be made only before the due date of filing the return u/s 139(1) of the Income Tax Act.”

CA (Dr) Suresh Surana reinforces this point: “Taxpayers who miss the ITR due date cannot later opt for the old regime. The choice is available only when the return is filed on time.”

Old vs New Regime: Key Differences

The new tax regime offers lower tax rates but comes with limited exemptions and deductions. In contrast, the old regime allows taxpayers to claim deductions and exemptions, but only if the return is filed by the deadline. For AY 2024-25, taxpayers missing the September 16 deadline must now file belated returns under the new regime.

For business or professional income, filing Form 10-IEA on time is mandatory to continue under the old system. Missing this step results in an automatic shift to the new regime.

Why Late Filers Must Use the New Regime

The Department aims to simplify compliance, reduce misuse of extended deadlines, and ensure certainty in tax administration. Surana explains: “Mandating that the old regime can only be chosen on-time ensures timely compliance and reduces last-minute adjustments.”

The Cost of Filing Late

• Late fee: Up to Rs 5,000 (capped at Rs 1,000 for incomes below Rs 5 lakh)

• Interest: 1% per month on unpaid tax

• Other impacts: Loss of deductions, inability to carry forward losses, penalties up to 50% of avoided tax, and in severe cases, prosecution with imprisonment ranging from three months to seven years.

Revising Returns: What You Can and Cannot Do

Taxpayers without business income can revise their returns if filed on time, allowing a switch between regimes. However, belated filers have no such option and must file under the new regime. Surana cautions: “Avoid last-minute filing. Portal traffic, data mismatches, or errors can create defaults. Early filing allows time to correct mistakes.”

No Exceptions After the Deadline

Once the section 139(1) due date passes, flexibility ends. Belated filers—whether salaried or self-employed—cannot opt for the old regime. Missing the deadline doesn’t just trigger penalties; it also restricts your tax planning options.

Surana concludes: “Timely filing protects your pocket and preserves your choices. Don’t let last-minute delays force you into the new regime.”