ITR Filing Deadline Nears: How Late Filing Can Affect Refunds, Loans, and Even Visa Applications

The government has set September 15, 2025, as the final deadline to file Income Tax Returns (ITR) for the financial year 2024–25 (Assessment Year 2025–26). With just hours left, taxpayers are being urged to complete the process before the cut-off. Failing to do so can lead to more than just late fees—it may affect refunds, loan approvals, and even visa applications.

Why Timely ITR Filing Matters

Filing your ITR on time is more than a legal requirement; it ensures smooth financial operations and helps build a trustworthy credit history. Here are the main risks of filing late:

1. Penalty on Late Filing

If you miss the September 15 deadline, a penalty is levied under Section 234F of the Income Tax Act. The fine varies depending on your income bracket and the duration of delay. While the maximum penalty is ₹5,000, those with income below ₹5 lakh may face lower fines. Still, repeated delays can dent your financial profile.

2. Delayed Refunds

For taxpayers eligible for a refund, late filing almost always results in delays. Refunds are typically processed only after filing and verification. A delayed return pushes your refund further back in the queue, which can impact your liquidity and financial planning.

3. Interest on Pending Tax

If any outstanding tax remains, filing late triggers interest under Sections 234A, 234B, and 234C. This interest is calculated monthly, which means even a short delay can increase your tax liability. For those with significant dues, this can translate into thousands of rupees in extra costs.

4. Trouble with Loan Approvals

Banks and financial institutions often require ITR records for the last two to three years when processing applications for home loans, car loans, or personal loans. If your ITR is missing or delayed, lenders may view it as a red flag, making it harder for you to secure financing. Even if approved, you might face stricter conditions or higher interest rates.

5. Issues with Visa Applications

Many foreign consulates and embassies, especially in countries like the US, Canada, and the UK, ask for ITR proof as part of the visa process. It serves as evidence of financial stability and ties to India. Missing deadlines or inconsistent filing history can complicate the visa approval process, leading to delays or even rejections.

How Much Can You Be Penalized?

The exact penalty depends on your income and when you eventually file:

• Up to ₹5,000: Standard penalty for most taxpayers who miss the September 15 deadline but file before December 31, 2025.

• Reduced Penalty: If your income is below ₹5 lakh, the late fee may be restricted to ₹1,000.

• Additional Costs: Interest on outstanding taxes continues to add up until the filing date.

For example, if a taxpayer has dues and delays filing even by a day, the combination of penalty and interest can easily cross ₹5,000–₹6,000.

What You Should Do Now

Gather Documents: Collect Form 16, Form 26AS, AIS (Annual Information Statement), deduction proofs, and bank statements.

Choose the Correct Form: Salaried employees typically use ITR-1, while those with business income, capital gains, or foreign income may need ITR-2, 3, or 4.

File Online: Log into the Income Tax e-filing portal and submit your return.

Verify Quickly: Don’t forget to e-verify within 30 days; without verification, the filing is considered incomplete.

Final Word

The consequences of late ITR filing go beyond penalties. From delayed refunds to hurdles in getting a loan or visa, the ripple effect can be significant. With the deadline just a day away, taxpayers should not wait until the last minute. Filing on time ensures compliance, peace of mind, and financial credibility.