Have you filed your income tax returns for 2017-18? If not, get it done the soonest before July 31st 2018, because the Income Tax Department can levy a penalty of up to Rs. 10,000 on those who do not file the tax returns by the end of this month. It is not just the penalty, but a delay in filing of income tax returns (ITR) makes you liable to pay interest as well.
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Below given are repercussions and penalties of not filing ITR within the due date:
If the return is filed after due date, but before 31 December, then you will have to pay Rs. 5000 as fees, while in other cases the fee would be Rs. 10,000. If your total yearly income is not more than Rs. 5 lakh, then fee payable would be Rs. 1,000.
- Delay in Processing of Return on Income
When you file the return and verification is done, the Income Tax Department’s Central Processing Centre, Bengaluru, processes the ITR. It is then that your tax liability or refund is analyzed. Thus, if you delay in filing the return, there will be delay in receipt of the tax refund.
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- Time to Revise Income Tax Returns is reduced
If you are filing ITR and make a mistake, you have time only till March 2019 to rectify ITR for 2017-18. Taxpayers earlier had the option to revise and resubmit the ITR until 2 years, but from this financial year, the time to fix errors in tax filing has been reduced to a year. Thus, the earlier you file, you will have longer time to revise and rectify errors, if any.
- No Carry Forward of the Losses
You will not be allowed to carry forward any loses, falling under the heads such as ‘capital gains’ and ‘profile and gains of business or profession’, if you do not file ITR within the due date. But loses and unabsorbed depreciation under the head ‘income from house property’, can be considered to be carried forward.
- Interest on the Tax Amount
Interest at the rate of 1% is applicable per month or part of the month, up to the filing date, if ITR is not filed in the due date. This interest is applied on tax payable after deduction of tax deducted at source (TDS), advance tax, other reliefs, tax collected at source (TCS), tax credits etc.
It is advisable that taxpayers file income tax return in time to avoid consequences, charges, fees, and penal actions that come with delay in tax return or not filing one at all.