ITR Filing: Income tax department shortens time limit for condonation of delay – What it means for taxpayers | Mint

The Central Board of Direct Taxes (CBDT) has issued a new circular regarding the condonation of delays in filing Income Tax Returns (ITRs), superseding all previous instructions, circulars, and guidelines on this matter. Under Section 119(2)(b) of the Income-tax Act, 1961, the circular offers comprehensive instructions for managing applications about late filing of returns seeking refunds or carrying forward losses. It describes the guidelines that income-tax authorities must adhere to when processing such applications and the circumstances in which delays may be excused. Furthermore, depending on the size of the claims, the CBDT has given certain authority to different income-tax authorities to guarantee effective processing.

According to the most recent circular, the deadline for applying for a delay condonation has been shortened to five years from the end of the fiscal year in which the ITR was due. As a result, taxpayers will have one less year to submit requests for delay condonation. CBDT released the circular on October 1, 2024.

If you miss an ITR filing deadline, you can ask the tax authorities for mercy by requesting a condonation. It is applicable in two situations:

Late Electronic Verification: You may request a condonation if, within 30 days of electronic filing, you cannot verify your ITR, as long as you have a good basis for the delay.

Late ITR Filing: You may ask for a pardon if you fail to file your taxes by the annual deadline, which is typically July 31. However, a late fee can be based on your income and the delay. When determining whether to approve the request, the tax department will consider your justifications for the delay.

Time limit for applying for condonation

You have five years from the end of the relevant assessment year to submit an application for a condonation of a delay in claiming refunds or carry forward of losses. All authorities that have been given the authority to excuse delays are subject to this five-year limit. Within six months of the end of the month in which they are received, applications must be processed.

Court-related income tax refund claims

The time frame during which the case was ongoing in court will not be considered for calculating the five-year limit for refund claims resulting from a court order. Within six months of the court order date or the end of the fiscal year, whichever comes first, the condonation application must be submitted.

Supplementary income tax refund claims

If other requirements are satisfied, late applications for supplementary refund claims (extra reimbursement following assessment) may be accepted. No interest will be paid on late refund requests, and the income must not be taxable in another person’s name. The refund must result from self-assessment tax, advance tax, or excess tax that was withheld or collected at the source.

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