ITR Filing For AY 2026: What Happens If You Do Not File Your Income Tax Return?

The deadline to file your income tax return (ITR) for the financial year 2024-25 was originally July 31, 2025. However, this year, there has been a bit of a breather. The Central Board of Direct Taxes (CBDT) has extended it to September 15, 2025 to accommodate updates and recent changes in the ITR form, changes in tax slabs, capital gains reporting, and a few other structural tweaks.

Many taxpayers who mistakenly miss the deadlines or might feel like skipping filing their ITRs altogether should know that there could be consequences of these actions, some small, some

Late fees, even for a delay of a single day: The most immediate outcome of a missed deadline is a late filing fee under Section 234F of the Income-tax Act, 1961.

If your taxable income is above Rs 5 lakh, the penalty can go up to Rs 5,000. For those with income below Rs 5 lakh, it is capped at Rs 1,000.

If your total income is below the basic exemption limit, no late fee applies. But only if you are not otherwise required to file your ITR, like in cases involving foreign assets or high-value transactions.

Interest keeps ticking: If you have got any unpaid tax dues, there is interest to be paid too, under Section 234A of the Income-tax Act, 1961.

An interest of 1 per cent per month (or part of a month) is charged on the outstanding tax, starting the day after the due date.

Let’s say you owe Rs 2 lakh in taxes and end up filing three months late. In this case you would end up with Rs 6,000 in interest. This amount is in addition to the tax and any penalty.

Some benefits vanish: If you have made losses on stocks, mutual funds, or your business this year, and you are hoping to carry them forward to offset next year’s gains, that only works if you file your ITR on time. Miss the due date, and those losses cannot be carried forward. The one exception is losses from house property (such as home loan interest) which can still be carried forward even with a delayed return.

Trouble with loans, visas, and more: Lenders often ask for ITRs when applying for home or car loans, and even during visa applications, especially for countries like the US, the UK, Canada, and Australia. Banks may ask for your last few years’ returns before clearing a loan. Skipping your ITR does not automatically disqualify you, but it can certainly complicate things.

In some cases, like foreign remittances, asset transfers, or large transactions, you may also need to show tax clearance, which requires a filed return.

‘Misreporting’ Issue: If you have taxable income but don’t file your ITR, such a miss could be treated as ‘misreporting’ by the Income Tax Department. In such cases, the authorities can impose a penalty of up to 50 per cent of the tax under Section 270A of the Income-tax Act, 1961. In rare instances, it can even lead to prosecution under Section 276CC of the Act.

If the unpaid tax is more than Rs 25 lakh, the imprisonment can range from 6 months to 7 years. For a lesser amount, the term could be 3 months to 2 years, along with a fine.

However, prosecution is typically not pursued if the unpaid tax is below Rs 10,000, or if the person files an updated return under Section 139(8A) of the Income-tax Act, 1961.

It may not seem urgent when you are busy, especially if you are not due for a refund or your income is not very high, but missing the ITR deadline can add unexpected costs, financial, procedural, and sometimes legal hassles. The extended deadline this year (which is 15 September) is a good opportunity to avoid all that.