Income Tax: Taxable income but 'forgot' to file your ITR? Here's what happens
Defaulters will have to pay Rs 5,000 if taxes are paid after the deadline of July 31 but before December 31 of the assessment year.
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01:08 PM IST
With days to go for the deadline to file income tax returns (ITR), many with incomes more than Rs 2.5 lakh per year do not file their taxes.
There are also cases where employees with their tax cut by the employers (TDS; Tax Deductible at Source) feel that they need not file their income tax return as it has already been cut by their employer. However, every individual with income over the minimum taxable limit (Rs 2.5 lakh per year in this case) are required by law to file taxes.
However, in case your TDS is cut and you do not file your income tax return, here's what happens:
Currently, the penalty for late tax filing is applied as per the provisions of section 271F. The new provision will replace this section from next year which leaves it on the discretion of an assessing officer to levy a penalty of Rs 5,000 if an individual fails to file returns before the end of the relevant assessment year.
In simple terms, as per provisions of Section 139(1) of the Income Tax Act, 1961, every person whose total income exceeds the maximum amount, which is not chargeable to income tax, shall by the due date, file his return of income in prescribed form. Failure to do so by the due date or before the end of relevant assessment year will attract penalty under Section 271F of IT Act 1961, amounting to Rs 5000.
Defaulters will have to pay Rs 5,000 if taxes are paid after the deadline of July 31 but before December 31 of the assessment year.
Failing to file taxes by December 31 will mean a penalty of Rs 10,000 against the defaulter. However, taxpayers earning not more than Rs 5 lakh annually will have to pay only Rs 1,000 for the delay in filing income tax return.
However, these penalties are liable be only for this year. From next year, the penalties will be even more.
Finance Minister Arun Jaitley while presenting the Annual Budget in February this year had introduced a late filing fee under new provision of Section 234F under Income Tax Act. As per the rule, taxpayer will have to pay penalty of up to Rs 10,000 for late filing of ITR.
From next year onwards, the government has also reduced the maximum time allowed for filing returns. Till 31st March 2018, you have the opportunity to file return for FY 2016-17 as well as FY 2015-16 but from next fiscal, you will be able to file only for the year immediately preceding it.
Chetan Chandak, Head of Tax research, H&R Block India said, "So in the AY2018-19, you will be allowed to file return for FY 2017-18 and even if you miss the July 31st due date, you will be allowed to file delayed return any time before the end of the AY i.e. only till 31st March 2019. Government is also making conscious efforts in reducing the time allowed for completion of scrutiny assessment. It has already made the necessary amendments in law for this."
Avoid paying penalties and file ITR before the due date.
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