Penalty for late filing of the Income Tax Return for individuals under the Income Tax Act, 1961 is up to a maximum of amount of : 

The correct option is Rs. 10,000.

Key PointsThere are a few reasons why it is important to file ITR on time -

• Late filing can attract penalties and interest.
• Late filers may not be able to claim certain deductions and exemptions.
• Late filers may not be able to carry forward their losses to subsequent years.

Important PointsSection 234F of the Income Tax Act, 1961, deals with the penalty for late filing of income tax returns. According to this section:

• If the individual files the return after the due date but before December 31 of the assessment year, a late fee of Rs. 5,000 is applicable.
• If the individual files the return after December 31 of the assessment year, the late fee increases to Rs. 10,000.
• However, if the total income of the individual does not exceed Rs. 5,00,000, the maximum late fee cannot exceed Rs. 1,000.

In addition to the penalty, late filers will also have to pay interest on the unpaid tax. The interest rate is 1% per month, calculated from the due date of filing the ITR to the date of actual filing.