ITR filing: Approval for condonation of delay helps this taxpayer save over ₹3.42 lakh

Not being able to file an income tax return (ITR) before July 31, 2024, prevented Suresh Jain (name changed) from filing his ITR under the old tax regime, thus missing out on certain exemptions and carry-forward of losses to which he was entitled.

Thanks to the condonation of delay, which was recently approved by the tax department, Jain was finally allowed to claim exemption and carry forward losses, thus enabling him to save over ₹3.42 lakh.

For the uninitiated, the income tax department can allow condonation of delay for filing ITR after the expiry of the deadline. If the department grants approval, the taxpayer can claim a deduction even after the deadline.

“In this case, we were earlier not allowed to carry forward losses and claim certain deductions such as HRA because the deadline for filing ITR had expired on July 31, 2024. As a result, the tax – by default — was calculated based on the new tax regime,” said CA Chirag Chauhan, a Mumbai-based chartered accountant.

“Therefore, we applied for an application under condonation of delay so as to claim these deductions and carry forward of losses,” he said.

What is condonation of delay?

Condonation of delay is a special relief provided by the income tax department for late filing of income tax returns. One type of delay relates to the late submission of ITR-V after 120/30 days of filing the return. The second is the failure to file the income tax return before the end of the relevant assessment year.

In the above-mentioned case of Jain, the tax department approved the delayed application for genuine medical reasons since the taxpayer was hospitalised during the time he was supposed to file the return.

Reasons for delay

In this case, the taxpayer underwent certain health issues, which led to his admission to the hospital. After discharge, he was on complete bed rest for a month. The taxpayer showed a total income of ₹41.24 lakh for FY 2023-24, which includes income from salary and other sources.

The taxpayer wanted to carry forward short-term capital loss of ₹1,392 and ₹3.41 lakh towards long-term capital loss. The department mentioned in its order that it was a fit case for exercising the power of condonation of delay under section 119 (2) (b) of the Income Tax Act.

The department admitted that he was fulfilling the conditions mentioned in the CBDT’s circular number 11/2024 dated 1.10.2024.