ITR deadline today: What happens if you don’t file your return by 31 July? Check penalties, interest, other consequences

With the July 31 income tax return (ITR) deadline set for today, the return filing season has entered its final phase. More than 5 crore ITRs had been filed until Thursday, reflecting a sharp surge in taxpayer activity as individuals rush to complete the process before the due date to avoid penalties.

Taxpayers who fail to submit their ITRs by July 31 would still have the option to file a belated return by December 31, 2026 but that comes with a late filing fee. Apart from that, some could also face interest on outstanding tax dues, delayed refunds and restrictions on carrying forward certain losses.

As just a few hours remain before the deadline, let’s look at the possible consequences of late ITR filing for salaried individuals, pensioners and other taxpayers who are yet to complete the process.

Penalty of up to ₹5,000

While a taxpayer is still allowed to file a delayed income tax return till the year-end, doing so will attract penalties between ₹1,000 and ₹5,000, depending on the income of the individual.

• For those with an income above ₹5 lakh, filing a belated return will incur a penalty of up to ₹5,000.
• For those with an income of up to ₹5 lakh, the maximum penalty for filing a belated ITR is ₹1,000.

Hence, filing your tax return on time remains the simplest way to avoid penalties, retain tax benefits and ensure quicker refund processing, especially as the income tax department increasingly relies on AIS, TIS, Form 26AS and other third-party data for verification.

1% interest on tax dues

If you have outstanding tax dues and yet fail to file your ITR by the due date, then you will have to pay interest under the Section 234A of the Income-tax Act.

A simple interest of 1% per month or part of the month is charged on the unpaid tax amount. The interest is calculated from the applicable ITR due date for the relevant financial year until the date the return is actually filed.

Filing a tax return after the due date does not automatically attract interest under Section 234A. This interest applies only in cases when there is an outstanding tax liability on the taxpayer.

Inability to carry forward losses

According to the provisions of the Income-tax Act, you can carry forward the losses of the current year to future periods, offset against future profits, thereby reducing the total tax liability.

However, taxpayers who file a belated return are not allowed to carry forward their losses to future years, meaning they lose the opportunity to set them off against future gains. These losses include loss on sale of capital assets like properties, stocks, mutual funds, and business losses.

Refund processing delays

Those expecting a tax refund should also file their returns on time. While a belated return may still be eligible for a refund, filing before the due date helps ensure the refund is processed sooner.

Loss of financial reputation

Delayed filing of an income tax return can also affect other aspects of your financial profile. Here are some consequences of late return filing:

• Lenders often ask for ITRs while processing loans and delayed filing may be viewed as a sign of weak financial discipline, potentially delaying approval timelines.
• In some cases, late filing could also create complications while applying for visas, as several countries require recent tax return documents as part of the application process.

Who needs to file ITR by July 31?

July 31, 2026 is the deadline to file ITR-1 and ITR-2 for salaried individuals, pensioners, and HUFs or non-audit cases whose income exceeds the basic exemption limit, or who undertook high-value transactions like large bank deposits or foreign travel in FY 2025-26. Here’s who needs to file ITR by today:

• Salaried employees and pensioners filing ITR-1 or ITR-2 with income above the basic tax exemption limit.
• Individuals with capital gains or rental income from multiple house properties not requiring a tax audit.

• People with income below basic exemption level but having high-value financial transactions, such as spending over ₹2 lakh on foreign travel, depositing over ₹50 lakh in a savings account, or paying over ₹1 lakh in electricity bills.

For business owners and professionals who file ITR-3 or ITR-4, the due date was extended to August 31, 2026 or October 31, 2026 if an audit is required.