What Happens if You Miss the ITR Filing Deadline?: Last Date for Filing Income Tax Return was 31st July of every year but this time the GOI has not extended the due date and despite record number of filing still many people are yet to file their Income Tax Return. So what is the course of action for the taxpayers who are yet to file ITR, whether they can file ITR or not.
What Are the Consequences of Failing to File a Return
If Taxpayers can file ITR , are there any consequences or they can easily file ITR, so there is always a penalty for not being punctual. In filing ITR also there are a lot of people who are late to the party. Let discuss below what are the consequences of late filing of ITR:
1. One has to pay late filing of fees u/s 234F of Rs 5000 for delay in filing of Return. But considering hardship to small taxpayer Rs 1000 late filing fees is applicable to those, whose GTI is less than RS 5 lakhs. One can file a late Return only till 31st December of the following financial year.
2. If you have any loss income except House Property and Depreciation then you can’t carry forward to the next year.
3. Interest will be charged on balance tax liability as per applicable provisions i.e. u/s 234A at 1% per month.
4. If you have a refund then the refund will get reduced due to late filing of return as late fees will get adjusted from the refund.
5. Taxpayers are even liable for Prosecution if even after issuing notices fails to file return. The imprisonment can be for a term of three months to two years with a fine.
So even if one misses the due date, one can file Belated Income Tax Return till December of following FY.
1. One can file Belated Income Tax Return only after paying late fees u/s 234F as discussed above.
2. Belated Return can be revised if the taxpayer finds any error or mistake in the return, kindly note that revised return can also be filed till December.
So if genuinely one gets late to file ITR then he/she can file return even after the due date but will lose many benefits or perks due to late filing of Return. The Author requests every person to file Income Tax Return within due date or before the due date to enjoy lots of benefits. Even if someone fails to file a Belated return then one can file ITR – U. For more details kindly look at our blogs.
Understanding the Importance of Timely Filing Income Tax Returns
Filing your income tax return (ITR) on time is not just a mere administrative requirement; it holds significant importance for individuals and businesses alike. Here are several reasons why timely filing of ITR is crucial:
Compliance with Tax Laws: Filing your ITR by the deadline demonstrates your adherence to tax laws and regulations. It showcases your commitment to fulfilling your civic duty as a responsible taxpayer.
Avoiding Late Filing Penalties: One of the immediate consequences of missing the ITR filing deadline is the imposition of late filing penalties. These penalties can result in additional financial burdens, adding to your overall tax liability.
Minimizing Interest Charges: In case you have any outstanding taxes to be paid, filing your ITR on time helps minimize the interest charges on the overdue amount. By submitting your return promptly, you mitigate the risk of accruing additional interest.
Claiming Tax Refunds: Timely filing allows you to claim any tax refunds owed to you. If you delay filing, you may lose out on potential refunds or experience delays in receiving them, depriving you of much-needed financial benefits.
Preserving Deductions and Benefits: Various deductions, exemptions, and credits are available to taxpayers, which can help reduce their overall tax liability. Filing on time ensures that you can claim and retain these benefits, optimizing your tax planning strategies.
Avoiding Audits and Scrutiny: Late filing raises suspicion and may increase the likelihood of your tax return being subjected to audits or closer scrutiny by tax authorities. Filing on time reduces the chances of being selected for such scrutiny.
Maintaining Financial Discipline: Timely filing of ITR encourages financial discipline and accountability. It promotes regular record-keeping, ensuring that you stay organized and maintain accurate financial records.
Establishing a Positive Reputation: Meeting the ITR filing deadline contributes to building a positive reputation as a law-abiding citizen or a responsible business entity. It enhances your credibility in financial transactions and dealings with various stakeholders.
Facilitating Loan Applications and Financial Transactions: Many financial institutions and lenders require ITRs as proof of income when processing loan applications or entering into significant financial transactions. Filing on time ensures that you have the necessary documents readily available when needed.
Peace of Mind: Perhaps one of the most significant advantages of timely filing is the peace of mind it brings. By meeting the deadline, you avoid the stress and anxiety associated with potential penalties, audits, or legal consequences, allowing you to focus on other aspects of your life or business.
In conclusion, timely filing of your income tax return is not just a legal obligation; it is a prudent financial practice that offers various benefits. By understanding the importance of meeting the ITR filing deadline, you can ensure compliance, maximize tax advantages, and maintain a positive financial standing.