There are many taxpayers in India who are in the habit of paying their income tax returns late. There is a penalty levied on the individuals who file their income tax returns late by the Income Tax Department of India. There are other consequences as well in addition to the penalty. An income tax return is filed by the individuals to save taxes. And ITR is required to be filed by every salaried individual and businessman.
ITR helps the taxpayer to reduce the taxes. However, there are certain rules that the taxpayers have to follow. And one such rule is filing ITR on time. If not obeyed, the taxpayer will end up paying a number of penalties and charges. The following are the repercussions and consequences of filing late income tax returns.
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The Section 234F that came into effect in April 2018 says that a penalty fee will be charged on individuals who default on furnishing the income tax return. The taxpayer for income with more than Rs. 5,00,000 would be charged with a penalty of Rs. 10,000 post the deadline of March 31. There is a little relief for the taxpayers with income of less than Rs. 5,00,000 as the penalty defined by the Income Tax Department is just Rs. 1,000.
Under section 234A, 1% interest is charged every month on the unpaid amount or the remaining tax. The calculation of the interest starts once the due date is crossed. Also, one cannot file ITR without paying the complete tax. So, the more the taxpayer delays, the more he will have to pay.
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The early the taxpayer pay the return within the due date, the earliest he will receive his refunds against the excess amount paid by him.
Reduction in Revision of ITR
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The earlier period for the revision of ITR was two years. However, from the financial year 201-18 onwards, the same is revised to just a time span of one year.
No Permit for Carrying Forward Loses
It is very important for a business owner or an individual to file their income tax return on time if they have incurred losses in the financial year. If they didn’t do so, there are chances that the losses cannot be prolonged to the next year. However, this does not apply to the taxpayers who have suffered losses from house property. Those losses can be taken to the next year.