Tax payer should require to comply two things every year
- Income Tax Return Filing or Declaration of income in prescribed form
- Payment of Income Tax if income exceeds exemption limits
Return should be submitted on or before 31st July / 30th September of the Assessment Year. Interest or penalty may attract in case of defaults or late filing of ITR.
Following are consequences of default or late filing of ITR
- Rs. 5000 Minimum Penalty for failure to furnish ITR before end of relevant assessment year.
- From AY 2018-19, penalty up to Rs. 10,000 for those taxpayers who do not file their ITR on time.
- Interest @1% per month for late payment of income tax.
- Losses cannot be carried forward in case of late/belated return.
- Taxpayer can lose interest on refund as delay in filing of ITR.
- In case of late filing of ITR, few deductions under 80 not able to claim.
- In extreme cases of willfully fails to furnish return, the income tax officer may penalize with imprisonment for 3 months to 2 years where tax is less than Rs. 25 lakhs and 6 months to 7 years where tax is more than 25 lakhs.