How to File ITR for Earlier Years and Claim Refund

What to do if I missed filing of itr of earlier years and there is some refund claim or losses?

Section 139(1) of the Indian Income Tax Act provides for filing of Income Tax Return on yearly basis by Due Date.

Everyone, whose Total Income (i.e Taxable Income) exceeds the basic exemption limit (i.e. Rs 2.50 Lakhs for FY 2018-19, 2019-20 and 2020-21) is mandatory required to file the ITR by Due Date.

The Due Date of filing ITR in India is July 31 of Assessment Year (Non-Audit ITR) and Sept 30th (Oct 31 wef FY 2019-20) (for Audit ITR). Other than the mandatory requirement also, many people wish to file an ITR in India for various purposes e.g. claiming refund, carry forward of losses, keeping a continuous track of ITR, for applying a Visa or Loan, Registering their non-residential status etc.

I missed the filing of ITR by due date but assessment year not yet ended?

Now, there may be various circumstances where a person misses or forgets to file the ITR by due date. It can be due to various reasons (personal or other reasons). In this case, though the assessee misses the due date for filing of ITR, however, assessment year is not yet ended. Here, under the provisions of Income Tax {Sec 139(4)} a Belated ITR can be filed before the end of Assessment Year (e.g. ITR of FY 2019-20 can be filed belatedly up to March 31, 2021). In relation to Belated ITR, following things are important to know:

Also Read:  ITR Filing Process in India for Non-Residents and Residents
Penalty Fee For Late ITR Filing

Belated ITR attracts Penalty Fee for late filing of ITR as under:

Late ITR Filing Penalty Fee U/s 234F (In Rupees)
Date of ITR Filing Net Taxable Income (Upto Rs 5 Lakh) Net Taxable Income (More Than Rs 5 Lakh)
Up to Due Date

(i.e. July 31, 2020 or extended date as per CBDT Circular)

Nil Nil
During Due Date To December 31 (i.e July 31, 2020 to December 31, 2020) 1,000  5,000
Jan 1 to March 31 of Relevant Assessment Year (i.e. Jan 1, 2020 to March 31, 2021). 1,000 10,000
Interest Penalty For Late Filing of ITR

U/s 234A, for late filing of ITR, interest penalty @ 1% per month shall be levied on the tax payable. If there is no tax payable, then this interest penalty will not be applicable. Hence, in refund cases, this interest penalty will not attract.

Interest For Late Payment of Taxes

If there is any tax payable, then interest u/s 234B shall be levied for the period till the date of tax payment. Hence, late ITR filing means Interest payment for late payment of taxes too (i.e. @1% pm).

Carry Forward of Losses

If there is a loss in that year for which ITR is not submitted by due date then in belated ITR that loss cannot be carried forward to next years. E.g. If a Non-Resident (NRI, Foreign Citizen) has sold a property in a FY (e.g. FY 2019-20) and incurred a loss in that sale. Then he need to file the ITR by due date if he wishes to carry forward that loss for setting it off with next years gains. If the ITR is filed late i.e. by the end of Assessment Year then though the ITR can be filed but loss cannot be carried forward to next years. Hence, this is a loss for not filing the ITR by due date.

Refund Claim

For the purposes of claiming the refund, Bleated ITR is as good as the normal ITR. Assessee (including Non-Resident i.e. NRI, Foreign citizen) is eligible for full refund as claimed in ITR.

Filing and Processing of ITR

Filing of ITR shall be as per normal process as it happens for a normal ITR. ITR processing shall also be normally as per normal ITR. Only thing will be since ITR filing is late hence processing will also be accordingly.

What if I missed filing Of ITR and assessment year has also ended?

There may be circumstances, when assessee (taxpayer) misses filing of Income Tax Return at all (i.e. he/she misses ITR filing due date as well belated due date.

Here, there may be various reasons as well as circumstances due to which assessee misses ITR filing e.g. a Non-Resident (NRI, Foreign Citizen) was unknown about tax system and implications in India in relation to his Indian Financial Transactions.

Now, here what option do the taxpayer have if there is a any Tax Refund which he can claim? There will be various questions strike the assessee mind in relation to his income tax refund.

  • Is there any way to file the ITR and claim the income tax refund back from tax department?
  • How to file ITR for earlier years if the belated ITR filing time lapsed?
  • What are the provisions of Income Tax in India in relation to claim refund for earlier years for which ITR could not be submitted?
  • Can I file a request or condonation application with Income Tax Authorities to allow me to file ITRs for past 3-4 years, which I could not submit due to personal reasons?
  • What happens if someone forgets or misses to file ITRs for many years?
  • How to file Income Tax Return for last 5 years?

Though the ITR filing window has been closed under general provisions. However, here is an umbrella provided under section 119(2)(b) of the Income Tax Act, where Central Board of Direct Taxes (CBDT) has been authorized to issue directions in such cases where there was a genuine hardship in filing of ITR.

Using these powers, CBDT has issue a Circular on June 9, 2015 {Circular 9/2015 [F No 312/22/2015-OT] Dtd June 9, 2015}. Through this Circular, CBDT has issued the guidelines to accept an application in such cases. Hereunder, are the relevant law and guidelines:

Extract of Section 119(2)(b) of Income Tax Act:the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorise any income-tax authority, not being a Commissioner (Appeals) to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law”

Hence, the section allows the Board (i.e. CBDT) to issue guidelines where CBDT can authorize an Income Tax Authority to admit an application, after the expiry of general timelines, in case of any exemption, deduction, refund or any other relief. The application shall be dealt on merit of the case.

What is CBDT Circular 9/2015 Dated 9-6-2015? What is the procedure to claim refund of earlier year for which ITR could not be submitted?

CBDT Circular (June 9, 2015

CBDT Circular provides guidelines to deal with the Condonation Applications in relation to allowing the filing of ITRs for the claim of Refund or Carry Forward of Loss or Set Off of Loss.

Authority To Accept The Application For Late Filing of ITR

Three layers of authorities have been provided in this Circular who can accept or reject the application for condonation of delay.

Authority (To Accept/Reject Application U/s 119(2)(b) Amount of Claim (Rs)
Principal Commssioner/Commissioner of Inc Tax (Pr CIT/CIT) Upto 10 Lakhs
Principal Chief Commissioner/Chief Commissioner of Inc Tax (Pr CCIT/CCIT) 10 Lakh to 50 Lakh
Central Board of Direct Taxes (CBDT) Exceeding Rs 50 Lakh
Time Limit For Which Application Can Be Filed

Condonation Application can be filed for a period of 6 years from the end of relevant assessment year. Hence, no application shall be entertain the any authority beyond 6 years from the end of relevant assessment year. Eg if a person has not filed his ITRs for last 10 years and he is planning to file application in FY 2020-21 then he can file this condonation application for missed ITRs for the years AY 2014-15 (i.e. FY 2013-14) and thereafter years. In other words, in FY 2020-21, this application can be submitted for AY 2014-15 year and onwards ITRs. Only relaxation here is that if the claim is due to passing of an order by some Court, then the period of pendency of matter with Court shall be reduced for calculating 6 years limit.

Time Limit For Disposal Of Application

The respective authority has to dispose of the application within 6 months from the end of month when application is received. The authority has to either accept or reject the application for condonation of delay within this time frame.

Merits Of Application

For allowing or rejecting the application, the authority shall consider the correctness of the claim and genuineness of the hardship for not filing the ITR. For this purpose, the respective authority can do such scrutiny and enquiries through its officers as it deems fit.

Certain Conditions

No interest will be allowed on Refund claim. Refund is due to excess TDS/TCS, Advance Tax, Self Assessment Tax payment.

ITR Filing

Once the respective authority allows the application for refund claim, assessee can file the ITR electronically on Income Tax Website (www.incometaxindiaefiling.gov.in) with the help of a login id (PAN number) and password. This is same as happens for a normal ITR filing.

FAQs – Remedies For ITR Not Filed For Earlier Years

Q: I am an NRI? I missed filing of ITRs for last few years. Am I eligible to file a request u/s 119(2)(b) with the respective authority?

Ans: Yes. Under section 119(2)(b), any person is allowed to file the application subject to fulfillment of other conditions of the Circular {Circular 9/2015 [F No 312/22/2015-OT] Dtd June 9, 2015}

Q: I am a Non-Resident (NRI, Foreign Citizen)? I have not filed any ITR for last many years. There was Tax Deducted at Source on my Financial Transactions in India. Now, What can I do? If There is any Income Tax Refund due, how can I claim that Refund?

Ans: Firstly, you need to get a tax computation prepared for the years for which you have not filed ITRs. If there is any Income Tax Refund due in these years, then you can file an application with the prescribed authority (i.e CIT, Pr CIT, CCIT, Pr CCIT or CBDT as per the size of your refund claim). You can file this application only for 6 years from the end of relevant assessment year (AY). So, now in FY 2020-21, you can file this application only for the AYs 2014-15 and thereafter years. You can file this application only for those years where there is a refund claim. Further, there should be a merit and genuine hardship for non-filing of ITR, which authority will consider for assessing your case.

Q: What are the documents required for filing application u/s 119(2)(b)?

Ans: Applicant need to make very complete application for filing with the authority. The supporting documents must contain all the documents, which can substantiate clearly the assessee claim for the refund. Further, assessee also need to provide reasons (along with documentary support if possible) for showing his/her genuine hardship for not filing the ITR in due course of time provided under the provision of Law.