Hello friends, have you filed your income tax returns?
Are you watching in numb horror as the deadline for filing IT returns comes ominously close and swings right past you?
The ITR deadline, extended by the the income tax department to August 31, is only two days away.
You may not have to pay tax, but you still have to file returns.
Every registered taxpayer has to file IT returns.
Only those who fall in the non-taxable income slabs — which is a total income less than Rs 2.5 lakh if you’re below 60 years old, Rs 3 lakh for those between 60-80 years and Rs 5 lakh for those above 80 — do not have to file ITR.
If you’re among those who fall in the taxable slab but have managed to offset your tax due through various deductions and exemptions, you will still need to file IT returns mandatorily. This article explains why.
If you think you’ll miss the deadline, take a deep breath and let’s figure it out.
You can check how to file ITR here.
But in case you still miss the deadline here’s what is likely to happen.
Two immediate effects of missing the deadline
1. You’ll need to pay a penalty
Until 2017, there was no penalty for late filing of income tax returns. Now, however, under section 234F, you will be penalised if you miss the deadline.
People with a total income below Rs 5 lakh will have to pay a penalty of Rs 1,000 if they file their IT returns before March 2020, according to the ClearTax portal.
People with a total income above Rs 5 lakh will need to pay a penalty of Rs 5,000 if they file their returns by December 2019. The penalty will double to Rs 10,000 if the return is filed only by March 2020.
2. You’ll need to pay interest
If you are due to pay tax, you’ll also to have to pay interest when filing returns. A simple interest of 1% is charged per month, or part of a month, on the amount of tax that’s not been paid. The interest is calculated based on how late you are filing the returns after the deadline.
According to Economic Times, no interest needs to be paid if you have no taxes due.
Two things you may lose out on
1. Loss of interest, delay in refund
2. No carry forward of losses
Once you miss the deadline, you cannot carry forward any loss incurred under the heads “profits and gains of business or profession” or “capital gains”, experts have told NDTV. Only unabsorbed depreciation and loss under the head “income from house property” is allowed to be carried forward to set it off against income of future years.
The worst case scenario is if the income tax department sends you a notice for failing to file your returns. This could even lead to prosecution, News18 reports. The jail term can range from three months to two years and depends on the amount of tax due, Livemint says.
But don’t panic just yet.
According to the law, no prosecution is initiated if you file your returns by the end of the assessment year. To file tax returns for FY 2018-19, the assessment year is 2019-2020.
It’s not too late, yet. Do it now!