Who is required to file the Income Tax Return?
Income tax is paid by every individual who earns above INR 2.5 Lakhs per annum. Post the limit of INR 2.5 Lakhs, each and every individual is liable to pay taxes. It’s also everyone’s duty to file Income Tax returns, even if the tax liability is nil. The last date for filing of Income Tax Return for FY 2019-20 is 31st December 2020.
What If You Forget To File Your Income Tax Return?
Many people think that if they have paid their taxes, but not filed their return on time, it’s absolutely fine, however, this is incorrect. Although you might have paid your taxes well on time, still individuals can lose getting benefits if they don’t file their ITR within the due date.
What Happens If You Forget To File Your Income Tax Return?
Interest loss in case of refunds: – If you are claiming a refund on your TDS deduction, you can lose interest in it, which is around 6% pa. For returns that are filed after the due date, the interest is calculated from the date when the return is filed till the time when the refund is granted to the individual. Talking about the usual procedure of interest calculation, it is done from the 1st of April of the following year.
Interest liability on the individual: For people who already have some form of tax liability, the late filing of the return would levy interest of 1% (from due date – date of filing return).
Penalty for non-taxpayers: In case you do not have to pay any taxes to the government for your income, but by 31st March, you fail to file the tax return, can attract a penalty of INR 5000 if the proper reasoning is not provided for return file delay.
The Penalties Of Late Filing Of Income Tax
If the income tax is filed after the due date by an individual, then there are certain penalties levied on the individual. Under section 271F, a penalty of INR 5000 is levied on a person if the income tax is filed late.
This penalty is mostly paid in cases where an individual receives a letter from the Income Tax department of the government of India.
The rare cases of penalties levied by the Income-tax department are imprisonment of 3 Months – 2 years (for tax liabilities less than INR 25 lakh) and up to 7 years (for tax liabilities exceeding INR 25 lakhs). Moreover, the times when you have not paid full or partial tax in the current or subsequent financial year, then you need to pay a penalty of INR 5000 along with 1% interest each month.
Important Dates For Income Tax Returns
Here are the lists of important details for every individual to keep a track off:
Every year, the return should be filed by 31st July but due to COVID-19 , deadline is 31st December 2020.
In case this date is missed by the taxpayer, you can file the income tax return by 31st March of next coming year.