The government has introduced a maximum fee amount of Rs. 10,000 for delayed filing of income tax return by individuals in the last budget presented in February this year.
Don't worry the fee is applicable from April 1, 2018 and will not apply for returns filed for FY2016-17 the deadline for which is July 31, 2017.
What is a belated return?
Filing Income tax return after the due date is called filing a belated return. According to the provisions of law as it stands today, a belated return can be filed anytime before the end of the relevant Assessment Year (AY).
Here is a simple example to understand this better.
A salaried individual has to ideally filed his return of income for the AY 2017-18 i.e. Financial Year (FY) 2016-17 on or before 31 July 2017. If he fails to do so, he can file a belated return on or before 31 March 2018.
However, this rule applies only from the AY 2017-18 (introduced in Budget 2016). In respect of returns pertaining to AYs prior to AY 2017-18 i.e. AYs 2016-17 and earlier years, a taxpayer could file a belated return anytime before completion of 1 year from the end of the relevant AY. Therefore, the amendment has effectively reduced the time period by 1 year
FY – Is the year in which the income is received
AY – Is the year in which the income is assessable to income tax i.e. the year immediately following the FY.