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What are the consequences of ignorance & Non-Filling of Tax Return?
Income Tax Return as it is generally referred to, is a formal document that you are mandated by law to submit annually. ITR filing is required if you want to avoid certain serious consequences, even though it may seem to be yet another burdensome government requirement. You've come to the right site if you want to learn more about this subject and the implications of not filing your ITR.
This post will go over the various consequences of failing to file your ITR and the grounds why you should take these consequences seriously this season.
For Indian taxpayers, submitting an Income Tax Return is an important responsibility as a citizen of India. There could be severe financial & legal repercussions if an income tax return is ignored or not filed as required. It is essential to understand these consequences so that taxpayers can steer well clear of them.
Therefore, it is important to understand these consequences so that taxpayers can avoid it.
- The most immediate consequence of not filing your Income Tax Return is a financial penalty.
- Applicable Penalties for not filing Income Tax Return
Various kind of penalties we might be face of late ITR filing.
|
Sections |
Offence Nature |
Kind of Penalty to be Levied under Income tax Act |
|
U/s 234F |
Submitting Income Tax Return past the given due date |
INR 5k if Income Tax Return is reported before 31st December of the AY, Rs.10,000 if Income Tax Return is reported after 31st Dec but before 31st March of the AY. |
|
U/s 234A |
A person fails to Submit Income Tax Return within the due date and has an outstanding unpaid tax |
Interest on the O/s Tax at 1% per month since the specified Timeline date |
|
U/s 271H |
Failure to file Tax deduct at source / Tax collected at source Returns within the given Timeline date |
INR 10k -INR 1,00k, besides penalty for Late filing U/s 234E, which is INR 200 per day till the Tax deduct at source / Tax collected at source is paid |
|
U/s 270A |
A person with taxable income fails to file his Income Tax Return or is found to under-report his income in the Income Tax Return |
50% of the aggregate Income tax liability Payable on the income eared for which no Income tax return was filed. |
- As perv tax Income Law, In case Income tax taxpayers fail to submit his Tax return by timeline date, Than he will be responsible to pay a penalty of INR 10k.
- This amount could be even higher if the amount of tax due is more than INR 10k.
- Moreover, if Income tax taxpayers file their return after the due date but before 31st Dec of the AY, they may be liable to pay a penalty of up to INR 5k.
- Aside from financial penalties, not filing your Income Tax Return can also have legal repercussions.
- As per to the Tax law, failing to file an Income Tax Return on time is a punishable offense & can lead to jail time for up to 7 years.
- Additionally, in case of discrepancies between the income declared in the Income Tax Return & actual income earned, Income tax taxpayer may be liable for prosecution under the illegal gains & Black Money provisions applicable provision of Black Money Act. (Undisclosed Foreign Assets, Income & Imposition of Tax Act, 2015)
- Can we face imprisoned for not submiting a Income Tax Return?
So Few Circumstances mentioned here were concerning the consequences of not filing Income Tax Return on the Specified Timeline date. If a Income tax taxpayer fails to file his income tax along with Income tax return altogether for an AY on time, Person will receive a Income tax notice from the Tax dept U/s 153A, 142(1), 148. If ITR is not Submitted even after these measures, the concerned individual might be face Income tax prosecution U/s 276CC for tax evasion.
Few Income tax imprisonment provisions are as mentioned Below.
- For Possible Income tax evasion more than INR 25,00,000/-: Then Penalty for Non filing Income Tax Return + Income tax imprisonment of at Minimum for Six Months, which can extend to Seven years.
- For Any other cases: Specified penalty + Income tax imprisonment of at least Three months, extendable up to Two years.
- There you have it, a comprehensive explanation of the different fines for filing a tax return after the deadlines. Make sure to pay the fine if you failed to file on time this time. Make it a point to submit ITR on time for the following AY now that you are informed of all the unfortunate conditions in order to avoid these problems.
- In addition to above, Income Tax Return filing non-compliance can also lead to problems like disqualification from various govt benefits, loss of creditworthiness & Loan schemes, other related problem’s.
Understanding the consequences of failing to file an income tax return and taking the appropriate actions to ensure compliance with tax rules are therefore important. In order to avoid costly financial penalties and negative legal implications, it is always preferable for taxpayers to pay their taxes on time and file their returns on schedule.
Here are some important pointers to remember:
- We should Keep all relevant documents ready
- Needed to ensure that ITR data filling on the form is accurate
- We needed to Properly verification our name, our address, and permanent account number , with DOB carefully filed in ITR
- Submit Income Tax Return on or before 31st July annual Basis
Conclusion
The income tax department has tight guidelines for submitting an ITR. People who earn more than the exemption threshold of INR 2.5 Lakhs per year must file an income tax return; neglecting to do so might have major consequences that can be devastating to your finances and peace of mind.
