Income tax is paid by every individual who earns above INR 2.5 Lakhs per annum. Post the limit of INR 2.5 Lakhs, each and every individual is liable to pay taxes. It’s also everyone’s duty to file Income Tax returns, even if the tax liability is nil. The last date for filing of Income Tax Return for FY 2019-20 is 31st December 2020. Many people think that if they have paid their taxes, but not filed their return on time, it’s absolutely fine, however, this is incorrect. Although you might have paid your taxes well on time, still individuals can lose getting benefits if they don’t file their ITR within the due date.
What Is ITR – Income Tax Return?
ITR or Income Tax Return as prescribed by the government of India has to be filed every year by an individual or a business who is receiving income in any form i.e. Salary, wages, investment returns, capital gains, or interest.
There is a specific date by which the income tax return must be filed by each and every person. Through the ITR, the Income Tax department comes to know if a person has paid excess tax, then he or she is eligible for a refund by the government, according to the department’s calculations, and even the source of Income, etc.
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What Happens If You Forget To File Your Income Tax Return?
- Interest loss in case of refunds: – If you are claiming a refund on your TDS deduction, you can lose interest in it, which is around 6% pa. For returns that are filed after the due date, the interest is calculated from the date when the return is filed till the time when the refund is granted to the individual. Talking about the usual procedure of interest calculation, it is done from the 1st of April of the following year.
- Interest liability on the individual:- For people who already have some form of tax liability, the late filing of the return would levy interest of 1% (from due date – date of filing return).
- Penalty for non-taxpayers: – In case you do not have to pay any taxes to the government for your income, but by 31st March, you fail to file the tax return, can attract a penalty of INR 5000 if the proper reasoning is not provided for return file delay.
Non Tax Payers – How Are They Affected For Not Filing The Return?
People who are not liable to pay any tax to the government would be required to prepare a computation and submit that no amount of tax was payable and everything was deducted at source. Also, this is helpful, when the timeline for tax file return is over.
What Are The Penalties Of Late Filing Of Income Tax?
If the income tax is filed after the due date by an individual, then there are certain penalties levied on the individual. Under section 271F, a penalty of INR 5000 is levied on a person if the income tax is filed late.
This penalty is mostly paid in cases where an individual receives a letter from the Income Tax department of the government of India.
The rare cases of penalties levied by the Income-tax department are imprisonment of 3 Months – 2 years (for tax liabilities less than INR 25 lakh) and up to 7 years (for tax liabilities exceeding INR 25 lakhs). Moreover, the times when you have not paid full or partial tax in the current or subsequent financial year, then you need to pay a penalty of INR 5000 along with 1% interest each month.
Important Dates For Income Tax Returns
Here are the lists of important details for every individual to keep a track off:
- Every year, the return should be filed by 31st July.
- In case this date is missed by the taxpayer, you can file the income tax return by 31st March of next coming year.
- If in case this deadline is also missed, the taxpayer has time till 31st March of next year to submit the IT return.
The time line for accepting returns is till two years from the date you paid the taxes, post which there is a lot of adverse consequences.
However what if you miss the date and do not file the tax on time, ever wondered how it would affect you?
According to section 234 in the directory of the Income-tax Act, there are various penalties and allegations for the delay in filing or non-filing of the returns. Usually, you need to pay interest of 1% for every month due to tax due to filing returns.
Filing Taxes
You can either hire a CA (Chartered Accountant) for filing your tax return or you can even do it yourself through the online facility provided by the Income Tax department of the government of India.
With the usual misconception of failing to pay taxes can attract penalties, people don’t understand that failing to file the return on time (for tax and non-taxpayers) can also attract a penalty.
How To File The Income Tax Return?
The income tax return can be filed through the online portal or a CA can also file the return for any individual or a business at a nominal charge.
Who Should E-File Income Tax Returns?
The online form is quite easy to be filled and anyone can file income tax returns
So, file your Income Tax well before due date and have a peace of mind!
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