Taxpayers who still have yet to file their ITR for the Financial Year 2024-25 can still file for this period with a late filing fee until December 31, 2025.
Only a couple days remain until the end of the year which means that the 31st of December is an extremely important date for those making various compliance or financial decisions.
Actions that need to be taken before January 1st must be made in order to purchase automobiles at today’s pricing, lock in current interest rates, complete required paperwork, etc.
Opportunity to purchase Automobiles at today’s Pricing
If you are considering purchasing an auto, you will want to make that purchase before the end of this month. Most automobile manufacturers will be raising prices effective January 1. Companies including Maruti Suzuki, Tata Motors, Hyundai and MG Motor all plan on raising prices.
MG Motor has announced a price increase of as much as 2%, due to increased costs associated with producing vehicles. As a result, some of their popular models, including the MG Hector will increase in price by Rs 38,000 or more, depending on the model purchased.
For example, Luxury Brands such as Mercedes-Benz and BMW have also raised their price ranges by 2% to 3%.
Potential Reduction in Interest Rates for Small Savings Schemes
Interest rates on government-supported small savings plans might be lowered after December 31. These plans encompass 11 savings options, with interest rates assessed by the government quarterly in January, April, July, and October.
The Reserve Bank of India announced on December 5th that it will be reducing its repo rate by 0.25% to 5.25%, and this opens up the possibility of a future rate cut as well. By lowering the repo rate, it becomes easier for banks to borrow money, which often lowers the interest rate on fixed deposits and small savings plans.
Investors wishing to park their money can benefit primarily from placing it now before this change takes effect.
The deadline for linking Aadhaar and PAN
All individuals who received Aadhaar Cards before October 1, 2024 will be required to link their Aadhaar and PAN cards before the end of the year (i.e., December 31). Failure to do so could result in having their PAN invalidated as well.
When a PAN becomes invalidated, the individual is no longer able to file an Income Tax Return or receive any kind of refund. Additionally, they will not be able to perform bank transactions or make any mutual fund purchases, which may cause undue hardship.
Filing Income Tax Return is Important for Getting Tax Refunds
Taxpayers who still have yet to file their ITR for the Financial Year 2024-25 can still file for this period with a late filing fee until December 31, 2025. Tax professionals are advising taxpayers that if they wait until after December 31 of this year to file their return, they could lose out on any potential refunds.
Any taxpayer who files a return after the due date will not be able to claim any refunds from the government that they may have qualified for and any refund that would have been received will instead be collected by the government.
The penalties for filing late are as follows:
- Rs 1,000 for income up to Rs 5 lakh
- Rs 5,000 for income above Rs 5 lakh
Additionally, filing an updated return (ITR-U) after the deadline attracts higher penalties:
- Within 12 months: 25% additional tax
- Within 24 months: 50% additional tax
- Within 36 to 48 months: 60%–70% additional tax
