Income Tax Return (ITR): Failed to file? You will have to pay penalty – 5 blows to avoid
This is for all those income tax payers who are in the habit of delay filing their income tax returns. Notably, there is a penalty levied by the Income Tax Department on individuals who do not file their Income Tax Return (ITR) at the specified time. Further, there are other inconveniences and consequences that are indirectly part and parcel of the penalty. ITR filing is done by individuals in order to save taxes. Every salaried individual has to pay taxes from their income and income from other sources.
However, the department does allow taxpayers to claim a certain sum on their investments by filing ITR. Simply put, ITR helps taxpayers to reduce their taxes. However, there are rules that have to be followed and one of them is to do it on time. If not done, then you will end up paying a host of penalties.
According to ClearTax, the following are the repercussions one has to face for delaying in filing ITR:
Under section 234F, which came into effect from April 1 2018, states that penalty fees will be charged for default of furnishing the return of income under section 139. An individual is charged a maximum penalty of Rs 10,000 post the deadline of March 31, 2019,for income above Rs 5,00,000.
A little relief is provided for the tax-payers who have incomes lower than Rs 5,00,000, as the Income Tax Department charges a penalty of Rs 1,000.
2. Reduction in Revision of ITR
For ITR in FY 2017-18, under the changed rules, one now only has a span of one year to rectify or revise some errors or changes in their ITR.
Earlier, the window period was of two years for the taxpayers.
According to section 234A, an interest of 1% is charged for every month or part of the month on the amount of tax remaining unpaid. The calculation of this begins as far as the due date is crossed and one cannot file an ITR without paying the complete tax amount. Hence, the more you delay, the more you pay.
4. No permit for carry forwarding losses
One should make sure of filing their ITR on time if they have incurred financial losses of any kind. If not, chances are that you cannot prolong the losses to the next year.
However, this does not apply to losses sustained from house property. One can take the loss to the next year, even without filing your ITR within the due date.
You are supposed to file your return within the due date, so as to receive your refund of excess taxes that you entitled of, at the earliest.