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If I miss or delay filing my income tax return, what will be the charges?

If you are in a taxable bracket, you must file an income tax return (ITR). The Income Tax Department is reminding taxpayers to file income tax returns for the assessment year 2021-2022. To avoid a last-minute rush, it is best to file your income tax return before 31st December. If you miss this deadline, you can still file your income tax return but in that case, it can be penalized. Up to ₹ 10,000. In addition, you have to pay the interest due to the late filing of your income tax return.

If you do not file your income tax return on time, these eight things will happen:

1) Penalty: In the case of non-filing of income tax returns within the due date, a three-tier fee system has been introduced. If the return is paid before the due date but before 31st December, the fee due will be ₹ 5,000, in other cases it will be ₹ 10,000. However, in the case of taxpayers whose total income does not exceed ₹ 500,000, the charges payable will be limited to ₹ 1,000.

2) Reduced time to revise your income tax returns: "Assume you are filing your ITR and you are making a mistake. According to the changed rules, you only have time till March 2022 (for ITR for FY 2020 - 21). Previously, wrong Taxpayers had a long window of 2 years to improve and resubmit the ITR, which has now been reduced to one year from the end of the financial year.

3) Interest payable on tax amount: When the income tax return is not filed on the due date, interest is charged at the rate of 1% per month or part of the month till the date of filing of ITR. Interest is payable on tax payable on deduction of TDS (tax-deductible at source), TCS (tax credited at source), advance tax and other deductions/tax credits available under the Act. TDS is deducted by the buyer or payer while TCS is collected by the recipient/Payee/seller.

4) No carry forward further loss: If the income tax return is not filed within the due date, the taxpayer will not be allowed to carry forward any loss under the heading "Profit and Profit of Business or Business" or "Capital Profit". However, the absorption depreciation and loss will be allowed to continue under the heading “Income from home property”.

5) Delay in processing of income return: Once the return is filed and its verification is completed, the Central Processing Center of the Income Tax Department, Bangalore, processes the income tax return. Only then is the taxpayer's tax liability or refund determined. Thus, if the taxpayer claims a refund, the delay in filing the income tax return delays the receipt of the tax return.

6) Physicalization of legal cases: A recent statement issued by the Supreme Court has declared that unreasonable action will be taken if the provisions of IT returns are not complied with in any form. It is the taxpayer's responsibility to ensure that he/she files his / her income tax return on time with accuracy. This statement should be taken very seriously by every taxpayer in the country as during the litigation process, the said taxpayer may be asked to state the exact reason for not filing his return on time.

7) Concealment penalty will be issued: If you have assessable income but you have not paid the return, you will be fined for concealing your income. This penalty will vary between 100% and 300%.

8) Applying for a loan can be a hassle: When you apply for any type of loan (personal, education, car, etc.) you need to declare your income. This is done because banks usually measure an individual's financial capacity before approving a loan. Therefore, it is very important to follow the guidelines of the Income Tax Department.

Thus it is advisable for every taxpayer to file an income tax return (ITR) on time and avoid various consequences including mandatory.

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