Penalty & late fee for late ITR filing

Filing past the deadline results in a standard ₹5,000 late fee (or ₹1,000 for income under ₹5 Lakhs), a 1% monthly interest charge on unpaid taxes, a potential penalty of up to ₹1.5 Lakhs if the audit report itself is delayed, and the loss of the ability to carry forward current year business losses.

Adding detail to the above. Late fee under Section 234F applies to the firm as well: Rs 5,000, or Rs 1,000 if total income is up to Rs 5 lakh. Interest under Section 234A is 1% per month (or part of a month) on the tax still unpaid after TDS and advance tax, from the due date to the filing date. The Section 271B penalty (0.5% of turnover, capped at Rs 1,50,000) is for the audit report not being furnished by its own due date, not for the ITR date. Late filing also loses the carry forward of business losses. General information, not advice.

One thing before the penalties: check the dates, because they moved this year.

For AY 2026-27 the CBDT extended the tax audit dates (Circular 07/2026 dated 28 Sep 2026):
- Tax audit report (Form 3CB-3CD): 21 October 2026
- ITR for a firm that needs audit: 21 November 2026

So 31 October is no longer the cut-off for the return. If you file inside the extended dates, none of the below applies.

If you do miss them:
- Late fee u/s 234F: Rs 5,000 (Rs 1,000 if total income is Rs 5 lakh or less)
- Interest u/s 234A: 1% per month or part month on the tax unpaid after advance tax and TDS
- Penalty u/s 271B: 0.5% of turnover, maximum Rs 1,50,000, but this is for the audit report not being filed by ITS due date, not for the ITR date. So get the Form 3CD uploaded first.
- Carry forward: business losses of the year cannot be carried forward if the return is late (u/s 139(3) and 80). Depreciation is the exception.

Also file the audit report before the ITR, the ITR-5 will not go through without the audit UDIN details.

This [tax audit due date guide under Section 44AB](https://taxgarden.in/blog/due-date-filing-tax-audit-report-section-44ab-india-2026) has the date table and the 271B math.

Human checks before posting (do NOT paste this part): (1) Extension verified on incometax.gov.in Latest News (memory note 08 Oct), re-open the circular page once more before posting. (2) Plain text only, CAclubindia does not render markdown; convert the anchor with the link tool. (3) UNVERIFIED: the 'ITR-5 will not go through without audit UDIN' line is from portal behaviour, delete if unsure. (4) 2025 Act applies from 1 Apr 2026; this is AY 2026-27 so 1961 Act sections used.