What are the consequences of non- filing of Income Tax Return?

Posted on Posted in Income Tax Return, Incometaxefiling, IT Return, ITR

What are the consequences of non- filling of Income Tax Return?: Filling of income tax return is mandatory on one hand and voluntary on the other hand. The government of India has introduced several types of forms to make the process of filling return simpler. The most vital feature of filing tax returns in India is that it should be verified by the individual who meet the prerequisites of section 140 of the Income Tax act, 1961. Thus, it is better for everybody to fill the income tax return at right time to avert the issues. Individuals having gross total income of more than Rs. 5 lacs are compulsorily required to file income tax return online.

Filing of income tax return is very necessary as it provides legality to what we are earning whether we are giving tax or not. It also helps in getting loans for personal as well as for business use. As per section 139 (1) of the Income Tax Act, every person is required to file Income Tax Return if his/her total income exceeds the tax limit exemption prescribed by the Income Tax Act on or before the due date of filing the return.

consequences of non- filing of ITR

What are the due dates of filing Income Tax Returns?

The due dates of filing the income tax returns for various assesses are as follows:

31st July

For all the persons (individual/HUF) who are not liable to get their accounts audited under the Income Tax Act.

30th September 

a) Companies

b) All the persons who are liable to get their accounts audited under the Income Tax Act or any other law.

c) All the working partners of the firm who are liable to get their accounts audited under the act or any other law.

Consequences of non- filing of income tax return in India.

  • Losses such as loss of business (speculative or non-speculative), loss of capital (short term or long term) and loss in the maintenance of horse race will not be eligible to be carried forward as per the section of 80 of the IT act.
  • You cannot revise your return if you are not filing IT return.
  • Non- filing of income tax return can bring a prosecution. In case of a company or a firm, it is the persons responsible for managing the activities of the business such as directors or partners who could face prosecution.
  • There are many finance companies which do not consider late filing of income tax return as proof of income and as such may come in the way of getting credit cards or any type of loans.
  • If you are not filling the income tax return, then your all hard earned money will be considered as a “black money” and you can also get arrested.

What are the penalties for late filing of income tax return?

  • Non- filing of income tax return leads to heavy penalties with interest u/s 234 A, 234 B and 234 C accordingly.  If the tax due is more than 10,000, then you must pay an advance tax on your income. There is also a penalty of Rs 5,000 if the IT return is not filed within one year of the end of the financial year.
  • If the return income is not filed and the notice from tax department has been received, then there will be a penalty in unpaid tax also.
  • If any taxpayer is not filing his/her return on time, then he has to pay penalties. For example, he/she has to pay a 1% interest for every month of delay. You can also loose refund interest u/s 244 A as late filing of IT return is attributable to the period by which you have filed late IT return. Under subsection 80, some deduction will not be available for late filing of IT return.

So, it is better to fill the Income tax return as it has many advantages which keep tax payer away from any problem. Your all transaction will be considered as legal because the government is having income records and also collecting tax on it.

Steps for Efiling Income Tax Return Through Net Banking

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