Thursday, February 2, 2023

MISSED INCOME TAX RETURN FILING DEADLINE? KNOW THE PENALTIES AND OPTION YOU HAVE

The last date of filing a tax return for the year 2019-20 was 10 January 2021. issue an official order last evening, the tax department has rejected requests for an additional extension of the due date for filing tax returns saying that generous additional time has already been given. The deadline was extended multiple times within the wake of the covid-19 outbreak. Generally, 31 July of the assessment year (AY) is the last date for filing the tax return. This year it was extended three times.

If you haven’t filed your tax return even currently, you still have the time to file a late or belated ITR. a tax return filed after the due date is known as a belated return.

You will need to pay a late filing penalty just in case you’re filing a late return. The penalty will be ₹10,000 as the last date was extended beyond 31 December. Generally, {every year|per annum|once a year|each year} the last date for filing a tax return is 31 July of the relevant assessment year. just in case you miss the ITR due date, a flat penalty of ₹5,000 is levied after you file late returns until 31 December of the assessment year and ₹10,000 just in case return is filed between 31 December and 31 March of the assessment year.

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For small taxpayers with income of up to ₹5 lakh, a penalty of ₹1,000 is applicable just in case of filing late ITR till 31 March.

The penalty along with the due tax has to be paid before you submit your late ITR. keep in mind that you just can’t escape paying a penalty on the late return, no matter whether any tax is due or not.

Issues with a late return

Besides paying a penalty, you’re also supposed to pay interest on due taxes each month till you file ITR. you will also not be allowed to hold forward bound losses to subsequent years for set-off. “For instance, a financial loss that’s a loss on the sale of the capital asset and or loss below the head profits and gains of business or profession can not be carried forward if the return is late,” said Prakash Hegde, a Bengaluru-based chartered accountant.

If any tax refund is due and the ITR is filed inside the stipulated time, you’ll earn interest on the refund claimed. A refund is claimed once the excess tax is paid on your income throughout the year as per Section 244A of the Income-tax Act, 1961. However, within the case of late returns, you’ll lose the interest that will be due on the refund amount.

Remember that if you fail to file your ITR at all, the tax department will send you a notice and it will even cause prosecution. there’s a provision of a jail term from 3 months to 2 years if you fail to file your ITR. Also, if the due tax is more than quite, the jail term will be up to seven years.

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