Skip to main content

Do not skip Filing ITR

 

Do not delay or skip filing your ITR

Late filing of income tax returns (ITR) invokes not only penalties but can also cause you to lose out on benefits such as interest on refunds


Paying taxes and filing tax returns on time is every taxpayer's responsibility. However, it is interesting to note that this has benefits for the taxpayer too and not filing returns or delaying them beyond the due date can have repercussions. Following are some of the negative implications of delaying the return-filing process or avoiding it.


Missing the tax-filing deadline may lead to penal consequences or receiving a notice from the income tax department. Your tax liability may also increase since you may have to pay certain prescribed penalties.


A taxpayer is liable to pay advance tax if the expected tax liability for the year exceeds Rs10,000. Advance tax needs to be paid in four instalments, which are due on 15 June, 15 September, 15 December and 15 March. If you do not pay advance tax, make a short payment or delay in filing the income tax return; you are liable to pay penalties as mentioned below.


Interest for deferment of advance tax: This interest is payable at 1% per month for delay in payment of advance tax on quarterly basis. This is payable on the amount of quarterly shortfall, starting from the date on which the advance tax was due.


Interest for default in payment of advance tax: This interest is also payable at 1% per month or a part thereof on the amount of tax due as on 31 March of the financial year till the final payment.


Interest for delay in filing tax return: This is payable if you file the tax return after the due date. It is payable on the net taxes due as on 31 March of the financial year. It is chargeable from the first day (usually, 1 August for individuals) following the due date (which is usually 31 July).


There is a way to avoid these penalties. Tax filing cannot be done unless a person deposits his tax liabilities to the government on a regular basis. He can, therefore, pay his taxes within the due date and file his tax returns on time. This will save him from having to pay additional interest on the same.


If a person fails to furnish his tax returns even after the expiry of 1 year of the financial year for which income tax return was to be filed (i.e., before the end of the relevant assessment year), the assessing officer may impose a discretionary penalty of Rs5,000, under section 271F of the income tax Act. But this position will change starting FY 2017-18. According to Budget 2017, if a person fails to file his tax return by the due date of 31 July, he will have to pay a compulsory late filing fee of Rs 5,000. Further, if he delays filing the return beyond 31 December of the assessment year, he will be liable to pay a late filing fee of Rs10,000. In the case of small taxpayers with the income up to Rs5 lakh, the maximum fees shall not exceed Rs 1,000.


It's important to note here that the discretionary penalty will now be replaced by mandatory late filing fees. Therefore, delaying the return filing can hurt you badly.


This penalty can be avoided if you are able to provide the assessing officer sufficient convincing reasons for the delay. However, under the proposed amendment, the assessment officer will have no discretion to waive the late-filing fees and therefore the only way to avoid this is to file the tax return before the due date.


Prosecution can also take place in rare and extreme cases, if the assessing officer finds that the taxpayer has wilfully failed to furnish the tax return within the due time. The penalty in such cases may be any one of the following:


(i) If the tax payable is less than Rs 25 lakh, the taxpayer may have to face a minimum imprisonment of 3 months and up to 2 years;


(ii) If the tax payable is more than Rs 25 lakh, the taxpayer may have to face a minimum imprisonment of 6 months, up to 7 years.


Generally, tax officers give the assessees sufficient notice and time to comply with the filing requirement and the taxpayers should not ignore any notice from the income tax officer. It is advisable that they pay the taxes and file the tax return within the time allowed by the officer.


Apart from penalties, there are other losses to that you would suffer by not filing on time.


The income tax Act provides you an interest at the rate of 0.5% per month on the excess tax you may have paid. Interest in such a case shall be allowed for a period starting from 1 April of the assessment year, to the date on which the refund is granted. No interest is payable for the period attributed to the delay in filing the tax return beyond due date, by the taxpayer.


You can carry forward your losses under various heads of income that you may have incurred in the financial years, to the next 8 assessment years. These losses can be used to set-off future gains and can thus result in savings. You must file your tax returns and claim the related losses before the due date (31 July or 30 September, as applicable to you).


If you file a late return, you cannot revise it in case of any error or omission; you will lose the interest amount that you may earn on the refund under Section 244A.


Tax return filing is a process that needs to be done regularly to establish a good record. Often, people file returns for more than 1-2 financial years in a single year in order to comply with bank or visa application requirements. This may, however, lead the tax authorities to form a bad impression, that you haven't been regular in filing income tax. Other benefits of filing return on time include getting faster refunds, smooth processing of loans, and even visa processing.




Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

OR

Call us on 94 8300 8300




 

Popular posts from this blog

SBI Magnum Tax Gain Scheme 1993 Applcation Form

    https://sites.google.com/site/mutualfundapplications/tax-saving-mutual-funds-elss     Investment Details Basics Min Investment (Rs) 500 Subsequent Investment (Rs) 500 Min Withdrawal (Rs) -- Min Balance -- Pricing Method Forward Purchase Cut-off Time (hrs) 15 Redemption Cut-off Time (hrs) 15 Redemption Time (days) -- Lock-in 1095 days Cheque Writing -- Systematic Investment Plan SIP Yes Initial Investment (Rs) -- Additional Investment (Rs) 500 No of Cheques 12 Note Monthly investment of Rs 1000 for 6 months and quarterly investment of Rs 1500 for 4 quarters.

Birla Sun Life Tax Plan Online

Invest Birla Sun Life Tax Plan Online   An Open-ended Equity Linked Savings Scheme (ELSS) with the objective to achieve long-term growth of capital along with income tax relief for investment.   After a bad patch from 2008 to 2010, Birla Sun Life Tax Plan has made a big comeback in the last five years, with a particularly good run since 2014. The fund's rankings, which had slipped to two stars in 2011-12, recovered sharply to three-four stars in the last three years. The fund has delivered a particularly large outperformance over its benchmark and peers in the last couple of years. The fund's investment strategy focuses on a diversified and high-quality portfolio, with parameters such as capital ratios and balance-sheet strength used to judge quality. It uses a combination of top-down and bottom-up approaches to take sector/stock positions. The fund avoids highly leveraged plays. Staying more or less fully invested at all times, the fund parks roughly half of its portfoli

Should you Roll Over 1 year Fixed Maturity Plans?

The period between January and March typically sees an uptick in the launch of fixed maturity plans, or FMPs. Not this year. Instead, fund houses are busy rolling over or extending the tenure of their one- year FMPs launched last year to three years. Investors in one- year FMPs have a choice. Either redeem units or roll over to three years. If you exit now, your gains will be added to your income and taxed in line with your individual slab rate of 10, 20 or 30 per cent. If you stay invested for two more years, you pay 20 per cent tax with indexation benefit. Yields have softened in the past few months on expectations of a rate cut. If the central bank continues its soft monetary stance, yields are likely to fall further. In such a scenario, it makes sense for investors, particularly those in the 30 per cent tax bracket, to roll over their investments and lock in at a higher yield now. In a surprise move, the Reserve Bank of India cut repo rate by 25 basis

Mutual Fund Review: IDFC Premier Equity Fund

  IDFC Premier Equity Fund, which falls under the presumed high risk group of mid- and small-cap schemes, can rely on astute and timely equity picks. These make it less vulnerable to fluctuations compared with others in the category   IDFC Premier Equity Fund is designed to invest in upcoming, but promising businesses available at cheap valuations, and hold on to these businesses until they reap desired returns. The experiment has been successful so far, and IDFC Premier Equity has emerged as one of the top performing mutual fund schemes in the mid- and smallcap category of equity schemes.    While the scheme is an open-ended equity fund, i.e. open for subscriptions throughout the year, it has a unique philosophy to limit fresh inflows. Thus, while an investor can always take the systematic investment plan ( SIP ) route to invest in the scheme throughout the year, inflows through a lumpsum investment have been restricted. Since inception, IDFC Premier Equity has been opened for l

IDFC Premier Equity Fund dividend

  IDFC Mutual Fund   has announced dividend under the dividend option of   IDFC Premier Equity Fund Direct-D . The quantum of dividend shall be   R 4.3464 per unit.   The record date has been fixed as May 06, 2015. Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds Invest in Tax Saver Mutual Funds Online - Invest Online Download Application Forms For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call --------------------------------------------- Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot]
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now