ITR Filing Last Date 2026: The ₹5,000 Fee Is the Cheap Part

The deadline most people think already passed is today#

If you run a kirana shop, drive a taxi, freelance as a designer, or consult on the side, your ITR filing last date is not 31 July. It is 31 August 2026. That is today.

Plenty of people have missed this. The July date got the coverage because it applies to salaried employees and pensioners, who make up the biggest visible block of taxpayers. A separate deadline was written into law this year for people with business or professional income who do not need a tax audit. They got an extra month, and it runs out on Monday.

The filing numbers suggest many of them have not used it yet. The Income Tax Department said on 28 August that more than seven crore returns had been filed for Assessment Year 2026-27 as of 27 August, and urged business and professional filers not to leave it to the last minute. By way of comparison, 5.9 crore returns were in by 31 July, with over 40 lakh filed on that final day alone.

No extension has been announced. The department has kept its helpline running around the clock until 23:59 on 31 August, which is a fair signal that it expects the date to hold.

The headline cost of missing it is a late fee of up to ₹5,000. That figure gets quoted everywhere. For most of the people it hits, it is also the least expensive thing that happens.

How one deadline quietly became three#

Some vocabulary first, because the tax department's language trips up more people than the arithmetic does.

A financial year (FY) is the twelve months you earn in. FY 2025-26 ran from 1 April 2025 to 31 March 2026. The assessment year (AY) is the year after, when you report that income and it gets assessed. So the return you are filing now, for AY 2026-27, covers money earned between April 2025 and March 2026.

Which form you use depends on what you do. ITR-1 and ITR-2 cover salary, pension, house property, and capital gains. ITR-3 and ITR-4 cover business or professional income. ITR-4, also called Sugam, is the simplified form for small businesses and professionals using the presumptive taxation scheme, where instead of maintaining full books you declare a fixed percentage of turnover as profit and pay tax on that.

Then there is the tax audit. Under Section 44AB, a business must have its accounts audited by a chartered accountant once turnover crosses ₹1 crore, though that threshold rises to ₹10 crore if cash receipts and cash payments each stay under 5% of the total. For professionals, the general audit line is gross receipts above ₹50 lakh. If you sit below these, you are a non-audit taxpayer, and the 31 August deadline was built for you.

That split is new. It came through changes to the Income-tax Act, 1961 made by the Finance Act, 2026, which gave non-audit business and professional filers until 31 August while everyone else stayed on 31 July. The Income Tax Department confirms in its own filing guidance that the ITR-4 due date for AY 2026-27 is 31 August 2026.

One more point, because it causes real confusion on the portal. The new Income-tax Act, 2025 came into force on 1 April 2026, but it does not govern this return. Income earned in FY 2025-26 is still assessed under the 1961 Act. If a form asks you to choose between "Assessment Year 2026-27" and "Tax Year 2026-27", you want the first.

What the ₹5,000 actually is, and when it is only ₹1,000#

The late fee comes from Section 234F of the Income-tax Act, 1961. The statute calls it a fee for default in furnishing return of income rather than a penalty, and the distinction matters a little: a penalty usually requires the department to act, while this is charged automatically when you file late.

The amount is ₹5,000. But the section carries a proviso: where total income does not exceed ₹5 lakh, the fee cannot exceed ₹1,000. For a great many small traders and self-employed people, the real exposure is ₹1,000.

Two further points rarely get made clearly. An older version of this section charged ₹10,000 for returns filed after 31 December, and that tier no longer exists. And Section 234F applies to a person "required to furnish a return of income under section 139", so if your income fell below the filing threshold and you had no obligation to file at all, a voluntary late return does not attract the fee.

The ₹5,000 headline is therefore roughly right, sometimes too high, and occasionally not applicable. Taken alone it is an irritation rather than a crisis. What sits underneath it is more expensive.

The interest clock, which ignores how much you earn#

Section 234A charges simple interest at 1% per month, or part of a month, on unpaid tax, running from the day after the due date until you actually file.

The phrase "part of a month" does the damage. File on 1 September instead of 31 August and you owe a full month of interest, not one day of it. On ₹80,000 of unpaid tax that is ₹800 for being twenty-four hours late. Miss by three months and you are at ₹2,400 on top of the fee.

There is genuine relief here, though. Section 234A only bites if tax is actually outstanding. If your TDS and advance tax already cover your liability, filing late costs you the 234F fee and no interest at all.

When the department owes you money instead, the loss runs the other way. Interest on refunds accrues at 0.5% per month, and on a late return it is calculated from the date you file rather than from the start of the assessment year. Every month of delay is a month of refund interest you never earn.

The regime trap, which is where the real money goes#

For business filers, this consequence can dwarf everything above, and it gets far less attention than the fee.

The new tax regime under Section 115BAC has been the default since AY 2024-25. To be taxed under the old regime instead, with its deductions for insurance premiums, provident fund, home loan interest, and so on, you have to opt out. If you have business or professional income, you opt out by filing Form 10-IEA, and the Income Tax Department is unambiguous that it must be furnished on or before the due date under Section 139(1).

Miss the due date and the option disappears for that year. A revised return will not bring it back.

The second layer is harsher still. The department's Form 10-IEA guidance states that a taxpayer with business income who opts for the old regime may later switch back to the new regime only once, and after switching back can never return to the old regime.

Put those two rules together for a small businessman who has been claiming ₹1.5 lakh under Section 80C, health insurance under 80D, and home loan interest. Being pushed into the new regime for a single year can cost him tens of thousands of rupees in extra tax. Set against that, ₹5,000 barely registers.

Salaried filers using ITR-1 or ITR-2 face a milder version of the same rule. They do not need Form 10-IEA and can choose their regime directly in the return each year, but only in a return filed by the due date. A belated return means the new regime by default.

Losses you spent a year earning, then cannot use#

Section 139(3), read with Section 80, allows losses to be carried forward to future years only if the return was filed within the original due date.

Business losses, speculative losses, and capital losses all fall away if you file late. For a trader who had a poor year in equities or futures, or a shop that lost money, this is not a fee at all. It removes a legitimate shield against tax on future profits, potentially for eight years ahead.

Two things survive a belated return: loss under the head income from house property, and unabsorbed depreciation. Both carry forward normally. Current-year set-off is also unaffected, so you can still adjust this year's loss against this year's other income. Only the forward journey is blocked.

If today is already gone#

Missing 31 August does not end the process. A belated return under Section 139(4) can be filed until 31 December 2026, and you can still claim a refund through it. After that, the updated return (ITR-U) lets you file for the previous four assessment years, though it carries additional tax on top of the normal liability and cannot be used to claim a refund.

For completeness, the dates still ahead for AY 2026-27: audit cases are due 31 October 2026, and transfer pricing cases 30 November 2026.

If you can still file tonight, the maths is straightforward. Reconciling Form 26AS and your Annual Information Statement against your bank records takes a few hours. The alternative can cost considerably more than that.

Key takeaways#

Non-audit business and professional taxpayers filing ITR-3 or ITR-4 must file by 31 August 2026. Salaried filers were due on 31 July, and that date passed without extension.
The Section 234F late fee is ₹5,000, capped at ₹1,000 where total income does not exceed ₹5 lakh. The old ₹10,000 tier no longer applies.
Section 234A interest of 1% per month applies only to unpaid tax, and charges a full month for any part of a month.
Filing late locks business filers out of the old tax regime for that year, because Form 10-IEA must be submitted by the Section 139(1) due date. For many small businesses this costs far more than the fee.
Business and capital losses cannot be carried forward from a belated return. House property loss and unabsorbed depreciation are the exceptions.

Frequently asked questions#

Has the 31 August 2026 deadline been extended? No announcement had been made as of 30 August 2026. The Income Tax Department was still publicly citing 31 August on 28 August, and has extended helpline hours to 23:59 on the due date. Any change would be notified through the department's official channels.

I am salaried and missed 31 July. What now? File a belated return under Section 139(4) by 31 December 2026. Expect the Section 234F fee and, if tax is outstanding, Section 234A interest. You will be assessed under the new tax regime.

Does the fee apply if I owe no tax? Section 234F applies to anyone required to file under Section 139 who files late, whether or not tax is due. Section 234A interest is different: it applies only where tax remains unpaid.

Can I still get a refund if I file late? Yes, through a belated return filed by 31 December 2026. You will lose refund interest for the delayed months, because interest on a belated return runs from the filing date. An updated return cannot be used to claim a refund.

How do I know whether my deadline was July or August? It depends on income type rather than employment status. Business or professional income without an audit requirement means 31 August. Salary, pension, house property, and capital gains alone mean 31 July.

What if I filed on time but forgot Form 10-IEA? For business and professional income, the old regime option is valid only if Form 10-IEA was filed by the due date. If it was not, the return will be processed under the new regime, and neither a revised return nor a rectification will change that.

Is this return filed under the old law or the new Income-tax Act, 2025? Under the Income-tax Act, 1961. The 2025 Act took effect on 1 April 2026 and applies to income earned from that date onwards.

Glossary#

Assessment Year (AY) The year in which the previous year's income is reported and assessed. AY 2026-27 covers income earned in FY 2025-26.

Belated return A return filed after the due date, under Section 139(4). Permitted until 31 December of the assessment year.

Form 10-IEA The form a taxpayer with business or professional income must file, by the Section 139(1) due date, to opt out of the default new tax regime.

Presumptive taxation A scheme under Sections 44AD, 44ADA, and 44AE allowing eligible small businesses and professionals to declare a fixed percentage of turnover as profit instead of maintaining detailed books.

Section 234A Charges simple interest at 1% per month on unpaid tax, from the due date until the return is filed.

Section 234F Charges a fee of ₹5,000 for filing late, capped at ₹1,000 where total income does not exceed ₹5 lakh.

Tax audit A mandatory audit of accounts under Section 44AB, triggered when turnover or receipts cross specified thresholds.

Unabsorbed depreciation Depreciation that could not be set off against income in the year it arose. It carries forward even from a belated return.

References#

Income Tax Department, File ITR-4 (Sugam) Online FAQs
Income Tax Department, Section 234F, Income-tax Act, 1961
Income Tax Department, FAQs on New Tax Regime vs Old Tax Regime
Income Tax Department, Form 10-IEA FAQ
Income Tax Department, e-Filing portal home
The Tribune / ANI, Over 7 crore ITRs filed for AY 2026-27; Aug 31 deadline nears for non-audit business taxpayers, 28 August 2026
Business Standard, July 31 isn't the ITR deadline for everyone: Here's who gets more time, 31 July 2026
Zee Business, Over 5.9 crore income tax returns filed by July 31
FAQs on interest under Sections 234A, 234B, 234C and 234D, reproducing Income Tax Department guidance
myITreturn, Late Filing Fee under Section 234F
ClearTax, Penalty for Late Filing of Income Tax Return for FY 2025-26

This article explains statutory provisions and published deadlines. It is not investment or tax advice. Individual circumstances vary, and readers with complex affairs should consult a qualified chartered accountant.