Income Tax Return filing Due Date is Nearby: Know the Penalty / Interest Consequences of Missing the Deadline

Income Tax Return - Penalty - Interest - taxscan

Income tax return filing is the talk of the town nowadays as the last date for filing the return is on 31st July 2022.

According to Section 139 of the Income-Tax Act, 1961, the due date for filing of tax returns is July 31 of the relevant assessment year for all assesses other than a company, a person whose accounts are required to be audited, and a few others specified in the section.

For the persons who are included in the non-tax audit category, including the individuals who had income from salaries, small businesses and professionals, the due date to file ITRs for financial year 2021-22 is July 31, 2022.

Missed the Deadline? Know the Penal Consequences

The Income Tax Act, 1961 provides a number of penal provisions to curb tax evasion and penalize the defaulters in case of non-filing of returns and non/short payment of income tax.

A penalty of Rs 5,000 will be charged for the delay in filing returns if the total income to be reported exceeds Rs 5 lakh. For small taxpayers, if the total income of the person is less than Rs 5 lakh, then the fee payable is up to Rs 1,000.

After December 31st of the relevant assessment year, one cannot voluntarily file ITRs. After that, if and when the income-tax department picks up your income and tax details available for scrutiny, the department will direct the defaulter how to comply with the mandatory provisions by paying penalty and interest.

Section 234 of the Income-Tax Act deals with penal interest that are levied for delays in paying taxes on time.

According to Section 234C, if you fail to pay your advance taxes in time, you will need to pay a 1 percent penalty every month or part thereof on income-taxes due till you pay out or till the end of the financial year. Once the financial year (in which you earn your income; 2021-22 at present) gets over, you need to start preparing your income tax returns to be paid by July 31 (the usual deadline date for filing your tax return). The year in which you file your tax returns is called the assessment year.

Further, if you have not paid 90 percent of the advance tax due by March 31 of the financial year, the penal interest clock starts ticking under section 234B from April 1 onwards.

As per section 234F, the department can impose a penalty of Rs.5000 if ITR is reported before 31st December of the Assessment Year, Rs.10,000 if ITR is reported after 31st December but before 31st March of the Assessment Year.

Further, as per section 270A,if a person with taxable income fails to file his ITR or is found to under-report his income in the returns 50% of the total tax payable on the income for which no return was furnished

Support our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.

Related Stories