Wednesday, February 21, 2024

Avoid making this error, as income tax will send a notice & fine you!

In the nation, filing income tax returns is crucial. It becomes crucial for you to file an income tax return if your wage is subject to income tax. On the other hand, if a person fails to file an ITR despite having taxable income, he may run into a lot of issues.

income taxFine for Late Filing

A late filing fee of Rs 5000 may be assessed under section 234F if an ITR is not submitted on time. The late fee is only allowed to be a maximum of Rs 1,000 if your gross income is less than Rs 5 lakh. On the other side, you won’t be penalized for filing late if your income isn’t taxable. In addition to the interest penalty on the tax amount, you will also be charged 1% interest per month or a fraction of a month (as per section 234A) on the unpaid tax amount. This interest will be calculated from the date that your tax return was due for the applicable financial year to the day that you actually filed it.

income tax

Reduced Benefits

You can carry forward losses in the stock market, mutual funds, real estate, or any other aspect of your business to affect the revenue in the next year. This significantly lowers your tax obligation. You cannot utilize these losses as an offset against future profits, though, if the return is not filed by the deadline and the loss is not disclosed in your ITR. Losses that are related to real estate, however, can be carried forward.

income tax

ITR cannot be revised

If the initial return was submitted within the deadline. The taxpayer may submit a revised ITR as many times as necessary. However, the benefit of filing a revised ITR is not accessible if the initial ITR is filed late. Therefore, the taxpayer should take the utmost care. And make sure that the ITR is precise in every way when submitting a delayed ITR. Because errors in a belated ITR cannot be corrected.

income tax

Punishment

The Income Tax authorities will likely assume that a person’s objective was tax avoidance. One primary effect of failing to submit an ITR on time. As a result, they have the authority to impose a fine under Section 270A for underreporting income. That is equal to 50% of the tax that the taxpayer dodged by failing to file returns. Depending on how much tax was evaded. They may additionally receive harsh prison time of three months to two years along with a fine.

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