If a taxpayer missed out to file the return by the due date, then the taxpayer would be penalized and could even get jailed.
If a taxpayer fails to file the tax return within the stipulated due date, the taxpayer could still file a belated return any time during the current assessment year (AY) 2019-20.
The deadline to issue Form 16 has been extended till 10 July, the last date for filing an income tax return (ITR) for FY18-19 might get extended beyond 31 July. But that should not become a cause for a taxpayer to leave tax filing for the last moment, especially if a taxpayer already has every of the required documents. In case a taxpayer fails to file their ITR by the due date, then the taxpayer would require paying a penalty and facing few restrictions when they file a belated return.
Belated return
When case a taxpayer fails to file the tax return within the stipulated due date, they can still file a belated return any time during the current assessment year (AY) 2019-20. For example, if a taxpayer fails to file returns for the current AY 2019-20 in time, then also the individual could file a belated return till 31st March 2019 or before the completion of assessment by the income tax department, whichever is earlier.
Penalty for late filing
However, a taxpayer is required to pay a penalty (late fee) at the time of filing returns. The penalty is Rs 5,000 if the taxpayer files their return after the due date but before 31st December of the AY, and Rs 10,000 if the taxpayer files it between 1st January and 31st March. Though, the penalty is limited to Rs 1,000 for those individuals who have an income less than Rs 5 lakh.
The penalty, as well as the due tax, is required to be paid before the taxpayer submits their belated ITR. An individual cannot escape paying penalty on the belated return, regardless of whether any tax is due or not.
Other issues
Other than paying penalty, a taxpayer is also supposed to pay interest on due taxes every month until they have filed their ITR. An individual is also not been allowed to carry forward certain losses towards subsequent years for set-off. For example, capital loss as well as a loss under income head house property could be carried forward for the next eight AYs and could be adjusted against gains during these years, but then only if the return is filed within the due date.
In case any tax refund is due to the taxpayer and the taxpayer has filed the ITR within the stipulated time, then the individual could earn interest on the refund claim. A refund could be claimed when excess tax has been paid on an individual’s income during the year, according to Section 244A of the Income-tax Act, 1961. But, for belated returns, a taxpayer might lose the interest that shall be due on the refund amount.
If a taxpayer fails to file their ITR at all, the tax department could send the individual notice and it could even lead in the direction of prosecution. There are also provisions for jail terms from 3 months to 2 years if a taxpayer fails to file their Income Tax Return. Also, if the due tax is above Rs 25 lakh, the jail term could be up extended up to 7 years.
Few things an individual must keep in mind before filing they're IT returns:-
Before filing the income tax returns, the taxpayer must collect all the necessary documents which are required for filing the income tax returns. For the salaried-class taxpayers, Form-16 is a mandatory document which is required to file the income tax returns. The details of money invested in tax-saver options, health insurance schemes, mutual funds, shares, banks, small savings schemes as well as other various options available. Other documents for example interest certificate from bank, interest paid on loans, insurance premiums, capital gains on the sale of stocks, mutual fund units, real estate unit, as well as salary slips.
A taxpayer must claim all the eligible tax deductions which could help in minimizing the income tax liability. The government furnishes income tax rebate and exemption on various investments and earnings from certain sources. All the applicable income tax deductions under Section 80C, 80B, 80D, 80DD, 80EE, 80CCD, 80TTA, 80E is required to be cross-verified before filing I-T returns.
If a taxpayer fails to file the I-T returns on or before the income tax filing deadline, there are certain penalties which are imposed on the taxpayers by the Income Tax Department. The taxpayers paying the income tax returns for previous financial as well as assessment years would be subjected to pay penalties along with the tax amount. All the taxpayers who fail to file income tax returns even after falling in the tax net are required towards paying penalties.
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