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

Mutual Fund Review: Religare Tax Plan

Tax Plan is one of the better performing schemes from Religare Asset Management. Existing investors can redeem their investment after three years. But given the scheme's performance, they can continue to stay invested   Given the mandated lock-in period of three years, tax saving schemes give the fund manager the leeway to invest in ideas that may take time to nurture. Religare Tax Plan's investment ideas revolve around 'High Growth', which the fund manager has aimed to achieve by digging out promising stories/businesses in the mid-cap segment. Within the space, consumer staples has been the centre of attention for the last couple of years and can be seen as one of the key reasons for the scheme's outperformance as compared to the broader market. It has, however, tweaked its focus and reduced exposure in midcaps as they were commanding a high premium. The strategy seems to have worked as it returned a 22% gain last year. Religare Tax Plan has outperformed BSE 100...

JP Morgan launches Emerging Markets Opportunities Equity Offshore Fund

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 JP Morgan launches Emerging Markets Opportunities Equity Offshore Fund    The new fund offer opens for subscription on 16 th June and closes on 30 th June. JP Morgan Mutual Fund today announced the launch of its open end fund of fund called Emerging Markets Opportunities Equity Offshore Fund. The fund will invest in an aggressively managed portfolio of emerging market companies in the underlying fund - JPMorgan Funds - Emerging Markets Opportunities Fund, says a JP Morgan press release. Noriko Kuroki, Client Portfolio Manager, Global Emerging Markets Team (Singapore), JPMAM said, "Emerging markets have been out of favour for several years, as growth decelerated and earnings struggled. However, in a world of globalisation, we believe that EM will eventually re-couple with DM, leading to the long-aw...

Nifty F&O

  1. What is a straddle? A strategy using Nifty options usually before a major event or when one is uncertain of market direction. Comprises purchase of a Nifty call and put option of the same strike price. Usually strikes are purchased closer to the level of the underlying index. 2. What is better ­ buying or selling a straddle? It depends.Implied volatili ty of options, or near-term expectations of price swings in an un derlier like Nifty , usually peaks before an event and falls when the outcome plays out ­ like Infy re sults in past years. However, once the event plays out, a sharp rise or fall in Nifty could result in price of the straddle rising ­ benefiting buy ers. But, normally , those who sell or write options charge hefty premiums from buyers in the hope that fall in volatility would ensure the options end out-of-the-money, hurting buyers. 3. So, do straddle sellers end up winning most of the time? Yes. That's invariably the case when market volatility is trending on the...

UTI Equity Fund Invest Online

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   UTI Equity Fund   Invest Online UTI Equity is a large cap-oriented fund with assets under management worth Rs. 2,269 crore (as on June 30, 2013). The fund was originally launched in May 1992 as UTI Mastergain and is benchmarked against S&P BSE 100. A couple of years back the name of the fund was changed to UTI Equity Fund and many of the smaller funds of UTI were merged into this fund. Performance The fund has outperformed its benchmark as well as the equity diversified category average in the last one-, three- and five-year periods. It has repeated the same in 2013 (as on May 31). Since its inception the fund has delivered an impressive 26 per cent compounded annual growth rate which is superior to its benchmark performance in the same period. Y...

Good time to invest in Infrastructure Funds

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Good time to invest in infrastructure The Sensex has gained almost 10 per cent from May 15 till date, while the CNX Infrastructure Index has gained almost 17 per cent in the period. The price to earnings ( P/ E) ratio of the BSE Sensex is 18.96; for the CNX Infrastructure Index, it is 24.57. The estimated P/ E for next year is 14.04 for the Sensex. Of the 24 companies that make up the CNX Infrastructure Index, six have a P/ E higher than 20. Does this mean infrastructure is fairly valued? Or, has it run up quite a bit? According to experts, barring stray companies, the infra sector is fairly valued and it is a good time to invest. Even if some companies are facing debt restructuring problems, once interest rates come down and regulatory norms become flexible, they will start giving good re...
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