0 have signed. Let’s get to 1,000!

Section 234F : Penalty on Late Filing of Income Tax Return

New penalty for late filing of Income Tax Return under section 234F is introduced in Budget 2017. If a person who is compulsorily required to file Income Tax Return (ITR) doesn’t file return on time then he is liable to a penalty as follows


For person with Total Income of more than Rs. 5,00,000

1.      If ITR is filed after 31st July but on or before 31st December = Penalty Rs. 5,000

2.      If ITR is filed after 31st December = Penalty Rs. 10,000

But For person with Total Income of less  than Rs. 5,00,000 = Penalty Rs. 1,000 only.


As it is I.T. Dept. recently has reduced the earlier I.T. filing period from two years to one year only. Besides, there is already a section called 234A,B,C where government is collecting heavy penal interest for the late payments of Income Tax. Can somebody logically explain what was the need to further penalize & suffocate the same tax payer under the pretext of penalty or late fees U/S 234F?.

                   Is the government so much short of the revenue sources that now they want to collect additional revenue by resorting to such tax terrorism methods.? Will you make the tax payer happy this way ? Enriching government's kitty by forceful imposition of fines by adopting coercive methods? 

                  Now my straight question to the law maker is that, was this provision in law so important & inevitable ? If so, then why was it not introduced in good old days, when the act was drafted ? Yes, here now the law maker may take a stand that section 271F being penalty of Rs.5000/- for late filing of return was already existing till F.Y.2016-17. But mind it sir it was purely discretionary in nature. And we thank old law maker that section 271F gave an opportunity to justify the delay in filing the return to the income tax officer.  And practically in past, this penalty provision was never harshly invoked by the revenue authorities. And thankfully & sensibly in very rare cases this penalty of section 271F was imposed on tax payers by the law maker.                                                              Unfortunately, this new section 234F does not give you any opportunity to justify your stand for late filing of returns. Whatever may be your practical difficulties, calamities, medical emergencies, if you are late in filing the income tax returns, you have to bear the brunt of it. Has the government become so callous heartless and materialistic? Is it not against the principles of natural justice? Even a murderer is given an opportunity to defend himself in the court of law. Then, is a tax payer's act of 'late filing of his return' a worst crime than a murderer?

                           Now my humble submission to the law maker, why is it difficult to adhere to the due date of filing the returns for every tax payer and avoid the penalty U/S 234F?


1] The laws of the land are so complex that an ordinary tax payer can not understand the same and ultimately he has to depend on some tax professional to file his returns on his behalf.

2]  Unlike western countries in India the trend is that hardly less than 10% tax payers, file the income tax returns on their own. So 90% or more tax payers are depending on some tax professionals for filing  their tax returns.

3] In today's scenario, due to TDS laws, practically in most of the tax payers cases, the TDS is deducted either by the Employers, banks, and or other third parties. And for them the last date of filing their TDS returns, for the quarter 4 of the year ended, is 31st May.  As per the law the TDS deducting Employers, banks and third parties are required to tender the TDS certificates by 15th of June to the tax payer. Which means till 15th June, till the tax payers gets his TDS certificates in his hands, he can not upload his correct returns. So to prepare & file his returns on or before 31st July, practically he gets only 45 days. I agree that If some body is filing his own returns himself then 45 days time is sufficient for him. Besides it is often seen that a TDS deductor either does not file his TDS returns, or lately files or wrongly files, consequently making the innocent deductee suffer for his TDS credit, causing forcible delay in filing his personal returns with penalty hit for no fault on his part. why this injustice to deductee?        

4] Since the tax payers is depending on his tax professional all the tax practitioners are getting hardly 45 days to finalise and file tax returns. Now my question is have many tax returns a tax professional can prepare, & file in 45 days time period ? Can a tax practitioner manage his practice & survive by filing a limited client's returns ,in those 45 days time frame.? Will those limited clients pay him that much of fees to support his office infrastructure through out the year? Will the tax practitioner be able to keep himself & his staff engaged for the rest of the period, after the tax filing due dates are over? Is it practically possible and ethical for him to  hire a skilled staff for seasonal period & fire them after due dates are over?

                   In today's scenario, besides income tax return filing , in the existing prevalence of various other laws, a professional has to comply with so many other deadlines like filing  of TDS returns, advance tax due dates, filing GST returns, Profession tax returns, Audits under various acts,  Companies act return filing compliance s and many more allied activities, in his day to day practice. Now adhering to all the above deadlines, can a tax professional file the income tax returns of all his clients before the due date ? If not, will his client be happily ready to bear the penalty of section 234F?  Will he be loyal & stick up to you in such penalty scenario every year? What is the option left to the client than to pay the penalty & bitterly move on to experimenting with some other tax professional, for next year in good hope? Now my question to all the tax practitioners is that, hasn't the law maker by way of introducing section 234F, mixed our bread & butter with mud and stones?. This provision is bound to create many recurring ugly situations between the tax practitioner & tax payer blaming each other for the delay in filing of the returns. Will it not make our life hell to go through all this and damage our practice, which we built like a nest with the pieces of feathers every year?. The tax payer and the government here may put a counter allegation that why do professionals accept so much of load of work if they can not comply with all due dates?. Here I would react & say that, If we accept only limited clients, does the client pay so much of abundant fees, so that the professional can manage happily his entire set up, with such limited number of clients through out the year? 

In the prevailing cut throat competitive market the poor tax practitioner is left with no option than to accept all sort of incoming jobs in practice & comply many due dates. The client also prefers an umbrella service, where he expects his tax consultant to take care of all his needs &  activities like accounting,

audit, income tax , GST, Professional tax, TDS, ROC , & many more. Client will always avoid hiring a separate professional for every dedicated activity.     

Governments should understand that the compliance burden has increased on professionals so heavily these days and invoking such harsh provisions of 234F will make their life further miserable.  


1] Penal interest for late payment of tax is some how made digestible to tax payer but penalty for late filing of Tax returns is hard to digest to any tax payer. & to avoid penalty it is quite possible that all those border line delayed cases where tax payer's income is just above the thresh hold limits, will not file tax returns at all, causing revenue loss to the exchequer only.

2] Those tax payers whose returns are delayed and where the income is just above the five lakhs mark, will try to disclose income below 5 lakhs to take advantage of the lower penalty hit of Rs.1000/-, hence again causing revenue loss to the authorities.

3] Invoking this section, there were will be mad rush this year to timely file the income tax returns in the last month of July & as usual the Income tax website is bound to crash. The history has proved time and again that the C.B.D.T. had to extend the due dates to save the embarrassment under some pretext.

4] The running technical glitches in GSTN website have already added to the woos of the tax payers & spoiling the time of professionals in futile exercises, shows nothing but lack of infrastructural support to the tax payer from government's side will add fuel to the fire.

5] To give respite to the tax payers from this penalty assuring timely returns many new but poorly qualified, semi qualified, inexperienced trainee entrants & crooks will enter the field of tax practice & by rendering poor quality services & defective & wrong returns will create further chaos in the tax department & create trouble to all.


As it is every citizen of India is burdened fighting his own battle on many fronts & by invoking such coercive, punishing laws, please do not open another front for him. And please do not expect all of us to come on roads like farmers did, for their demands. I hope you understand that ,we have many more descent & legitimate ways to protest for our demand. So I humbly request not to test on our nerves & omit this section 234F from the act. I am sure Government is  sensible enough to leave adamancy & also will not think to disappoint such a huge vote bank, who is contributing to the economy of the nation. I urge all my fellow brothers, professionals, advocates, tax practitioners, Institutes & association bodies  to stand & fight united in whatever possible legal ways & means till the death of this SECTION 234F.                 

               I also appeal, urge, & request every citizen of India to share this letter of mine so as to reach to maximum possible citizens and government authorities, as fast as possible and make them aware of our plight & demand, so as IT WILL HELP us to kill the KILLER WHALE SECTION 234F Before it kills us all.