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Have you missed filing tax return for previous year?

Have you missed filing tax return for previous year?

Have you missed filing tax return for previous year?

Those of us who have an income that exceeds the basic tax exemption limit have to file our income tax return under the Income Tax Act. The due date for filing the returns for the immediate past financial year is always the 31st of July each year, but there is always an extension in which one can file their belated tax return. So far so good.

However, according to the Finance Act of 2016, it has been agreed that the belated returns can be filed within one year from the end of the relevant assessment year or the completion of the assessment, whichever happens to be earlier. For example, for the FY 2016- 2017, the AY would be 2017-18, and the due date for filing the belated return would be the 31st of March, 2018. As of this year, the date is past. So what about those individuals who have yet not filed their returns for 2016- 17? Are there going to be any dire consequences if they have failed to file their returns?

According to the experts, here are some of the “penalties” that one might have to face for not filing their ITR on time:

  • An interest of 1% would be levied on the balance tax payable for each month for the delay in filing return.
  • A fee of Rs 5000 would also be charged if from the FY 2017- 18, the tax returns are not filed on time. Moreover, if the delay crosses the date of December 31 of the relevant assessment year, then the fine could go up to Rs 10,000. Again, if the income of the individual is less than Rs 5 lakhs, then the amount be Rs 1000 only.
  • The individual will also lose the opportunity to carry forward any other eligible losses and will not be able to claim the refund of any excess tax amount pair, and likewise the interest amount as well.
  • In case the individual fails to file a tax return from FY 2016- 17 onwards, then he would also have to face a penalty of 50% of the tax payable as per the under- reported income. There could also be penalties levied under the Black Money Act. In case this has been a deliberate ploy to evade taxes, the individual could also face 7 years of imprisonment and additional fines would be charged.

This is important because tax returns might also be required as evidence when one applies for loans, or visas for foreign travels. According to the experts, there are certain types of income on which there are no applicable TDS, that is on the interest from savings bank account. One should inform the concerned authorities in that regard and in case there has been an unwanted delay, one could also write to the tax authorities for the condonation of delay, which are subject to certain conditions and provided one can produce the relevant documents to support the claim.

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