Income Tax Return (ITR) filing is an annual financial activity that is the responsibility of every taxpayer in the country. For residents with a salary between Rs 2.5 lakh and 5 lakh who are exempted from tax, filing Income Tax Return is a duty. An individual can get their money back if in case, an excess amount of tax has been paid/deducted during a monetary year by filing ITR. However, there are consequences of not filing ITR on time.
By and large, citizens are required to file ITR by July 31 of the relevant assessment year. This year due to the pandemic, the government has extended the last date to file the ITR to November 30, 2020, for FY 2019-20. If in case, the taxpayers miss this deadline, then they have to pay the penalty charges according to Section 234F of the Income Tax Act (I-T Act) in order to file the Income Tax Return (ITR).
According to Income Tax rules, citizens are required to pay Rs 5,000 if the return is filed on or before December 31 of the assessment year. The penalty increases to Rs 10,000 if the assessee files the return after the end of the assessment year between January 1 and March 31 of the assessment year. Other than this, a delay in the filing of ITR makes the taxpayer liable to pay interest.
In the event that an assessee doesn’t file their ITR by any means, they won’t have the option to carry forward the misfortunes of the current appraisal year. Note that the Income Tax Act, 1961 sets down severe consequences if the return filing deadline isn’t met, paying little heed to the explanation.
Consequences of not filing ITR
According to experts, a penalty of a minimum of 50% or a maximum of 200% might be imposed on the taxpayers. Aside from the punishment for late filing, interest under segment 234A at 1% every month or part thereof will be charged till the date of payment of taxes. As soon as the mark of the due date of filing the ITR will be crossed, the calculation of the interest will start from that point only. Hence, the more you hold up, the more you pay.
Assessees may likewise need to confront indictment additionally (i.e., detainment for a duration of 7 years and penalty), in extraordinary and high-esteem cases. This may occur when the wilful default to outfit ITR and payable tax (after reducing the TDS and the taxes paid) surpasses Rs 10,000.
The deadline for filing ITR for FY 2019-20 has been extended to November 30, 2020, which implies that taxpayers have got an all-encompassing time limit for making investments to claim an income tax deduction by a month. One can likewise outfit or issue TDS (tax deducted at source) or TCS (tax collected at source) proclamations/testaments related to the monetary year 2019-20 by the all-encompassing dates of July 31 and August 15 individually. Tax Audit Reports can now be outfitted till October 31, 2020.