Tickling Time, Tax Tangles, and Tardy Traps – Tread Wisely, Taxpayers!
In life's
fast rhythm, it's simple to miss a beat. But when that beat is about filing your Income
Tax Return (ITR) on time, the result might add a sour note to your
financial score.
Welcome back to another JJ Tax Newsletter, where we uncover the critical link between punctual ITR filing and your financial prosperity. In this edition, we embark on a journey to decode the intricacies of late ITR filing – not to induce panic but to empower you.
Get ready to transform your outlook on punctuality and taxes. By the time you finish reading, you'll be armed with a fresh perspective and an action plan to navigate the realms of ITR filing.
Consequences of Late Filing
According to the Income Tax Department, failing to fulfill your tax obligations can lead to penalties,
interest, and even legal action.
Let's break down what you might face:
Penalty for Late Filing
If you miss the July 31 deadline, a penalty will be levied. Filing between August 1 and December 31 incurs a maximum penalty of Rs 5,000. However, if your total income is up to Rs 5 lakh, the penalty reduces to Rs 1,000.
Filing ITR After Due Date
Taxpayers have an option to file a belated return (delayed ITR) under certain conditions. This can be done up to three months before the end of the relevant assessment year, ie, December 31 of the assessment year. After this, the penalty can increase up to Rs 10,000.
Interest Charges
Alongside penalties, interest will be charged under Section 234A at a rate of 1% per month or part thereof on the outstanding tax amount. This continues until the tax is paid.
Prosecution for Deliberate Non-Filing
The Supreme Court of India in a judgment (Sasi Enterprises v Assistant Commissioner of Income Tax Criminal Appeal No 61/2007) categorically declared it is a taxpayer / Assessee’s statutory obligation to file a tax return and non-filing is an action liable for prosecution.
Deliberately ignoring tax compliances can lead to legal troubles. If you receive notifications and still don't file, the authorities may initiate prosecution. Penalties can range from three months to two years of imprisonment. As per section 276C if a person willfully attempts to evade tax, penalty or interest or under-reports his income and where the amount of tax evasion exceeds Rs 25 lakhs, the imprisonment term can extend from six months to seven years.
Our Advice
It's clear that timely ITR filing is more than a duty – it's a financial safeguard.
Don't let penalties and legal actions disrupt your financial harmony.
If you're
unsure about the process, consider seeking professional help from JJ Tax
experts.
‘‘Your financial peace of mind is worth every effort.’’