CRA Late Filing Penalty Increased ~ All You Need to Know About the New CRA Penalty Rate and How Can You Avoid it?

If you are a taxpayer in Canada then this information is important for you. The Canada Revenue Agency (CRA) today announced the Fixed Annual Interest Rate and CRA Penalty Rate that individuals and corporations will have to pay if they do not pay income tax on the due date. If you want to know about the increase in CRA Late Filing Penalty then read this article till the end.

If you want to avoid this late filing penalty then you should know about the CRA’s New Penalty Rate and also know how to avoid it. All the details are given in the following section in this article which will guide you to the proper updates made by the authority.

CRA Late Filing Penalty Increased

CRA also provides timely income tax estimates and suggests individual taxpayers pay their income tax on or before the due date. However, some taxpayers ignore the date and pay their taxes after the wrong due date. Therefore CRA has fixed certain penalties on individuals who have not paid their income tax on time. Further benefits from multiple programs will be given based on your income tax return and CRA is also getting their information from the income tax return details. There are two methods available to pay income tax on time. You can use both online and offline methods to deposit your income tax with proper details.

The interest rate is if you opt for filing income tax with certain Installments. Due to a delay in installment or you are not able to deposit the installment on time then the applicable CRA Interest Rate will also be applicable and everyone will have to pay the interest rate while filing the installment.

If you choose to deposit annual income tax then you have to pay the appropriate income tax on time and if there is any delay in filing the tax then you have to pay some late fee in the form of a CRA Late Filing Penalty. Here below I have described all the details and also how much the late filing penalty has been increased by CRA and what effect it has on the individual. So you should go down and know the complete update here.

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CRA Income Tax Late Filling Penalty 2024 – Overview

CountryCanada
Article OnLate Filling Penalty Increase
DepartmentCanada Revenue Agency
Available forTaxpayer in Canada
CategoryGovt Aid
CRA Late Filling Penalty in 20239%
Average Increase1%
CRA Late Filling Penalty Increase in 202410%
Official Websitecanada.ca

What is the New CRA Late Filling Penalty Rate?

The penalty for late filing is increased annually by CRA. As per the last financial year, the rate has been revised to 5% from 2017 to the present and now in the coming year, the CRA Late Filing Penalty Rate has been increased to 10% which was 9% in 2023. The increase rate will be effective from 1 January 2024 to 31 March 2024. So if you do not want to pay an extra amount on your actual amount then you have to pay income tax on time. As you can see in the point below, CRA Income Tax Penalty Rates may differ for all individuals.

  • If you have a balance and after that you are filing your income tax late then there shall be a penalty for you which can also delay your benefit return and credit payment.
  • Even if you can’t pay your balance, you should still file on time to avoid late filing penalties.
  • In the late filing, 5% on your 2022 balance with an additional 1% penalty also be charged if you delay filing the income tax and it will be applied for each full month to a maximum of 12 months.
  • If the CRA imposed a late filing penalty for 2019, 2020 or 2021 and requested a formal demand for a return, your late filing penalty for 2022 will be 10% of the amount you owe. You will be charged an additional 2% for each full month that you file after the due date, up to a maximum of 20 months.
  • The late filing penalty still applies when you get the COVID-19 Relief Benefits from the government.
CRA Late Filing Penalty Increased ~ All You Need to Know About the New CRA Penalty Rate and How Can You Avoid it?

CRA Tax Filling Interest Rate

If you pay tax in any country then all of you must promote the national economy. As a result, the government is also providing you with many benefits from many programs funded by these taxes. In Canada, the Canada Revenue Agency (CRA) is the responsible agency that collects all types of taxes paid by individuals. The authority collects taxes for each financial year to keep a record of overall finances.

CRA tax Interest Rate is also applicable and you will have to pay income tax and profit returns accordingly. While depositing income tax you have to provide complete and genuine details in the form along with required documents. You must ensure that the description is accurate and yours.

If the details and documents are invalid, your income tax return benefit will be delayed and some additional details will need to be provided to receive it on time. You can check the CRA Interest Rates on different categories in the table below.

Tax, duty, or other chargesOverdue remittancesOverpaid remittances – Corporate taxpayersOverpaid remittances – Non-corporate taxpayers
Goods and services tax (GST)10%6%8%
Harmonized sales tax (HST)10%6%8%
Excise duty except for brewer licensees (amounts due after June 30, 2003)10%6%8%
Fuel charge (under the Greenhouse Gas Pollution Pricing Act)10%6%8%
Excise tax (non-GST/HST)10%6%8%
Excise duty except for brewer licensees (amounts due before July 1, 2003)10%6%8%
Excise duty except brewer licensees (amounts due before July 1, 2003)8%N/AN/A
Excise duty (brewer licensees)8%N/AN/A
Softwood lumber products export charge10%6%8%

CPP Payment Dates 2024

Benefit Payments December 2023

OAS Payment Dates December 2023

CRA Benefits Payment Dates

How to Avoid From CRA Late Filling Penalty?

Every taxpayer should be aware of the new CRA late filing penalty increase. The penalty rate for late filing is increased annually by CRA and then implemented for the upcoming financial year. If you want to avoid a late filing penalty, you will have to deposit your income tax on time. You should also ensure that there is no delay in income tax payment, interest rates and penalties will also be applied accordingly.

If you want to avoid this, you will have to pay your income tax on time and avoid any kind of penalty or additional interest rate. You will have the facility to pay your income tax in monthly Installments. And if there is any delay in the installment then interest rate may be applicable for you. If you do not want to pay interest rate then make sure you pay the installment on or before the due date.

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