What if I cannot file the Income Tax Return on Time?
If you fall under the taxable bracket, then filing Income Tax Returns is necessary. Delay in filing ITR or avoiding the process of filing ITR can lead to complications later on. Moreover, in order to avoid the last-minute rush, it is advisable that you file ITR before the 31st of July. In case you miss the deadline due to any reason, you can still file ITR. However, it may invite a penalty.
We have listed down five things that will happen if you do not file ITR on time:
There is a three-tier fee system for not filing ITR on time. If you file ITR after the due date but before 31st of December, then the late fee will be Rs. 5000 whereas in other cases the fee can extend up to Rs. 10,000. However, if your income is less than 5,00,000, the fee shall be restricted to Rs. 1,000.
• Reduced time for Revising your ITR
For instance, while filing the ITR you end up making an error, you are only allowed to make changes before the March month. Earlier, the taxpayers had a 2-year window to revise and resubmit their ITR, which now has been decreased to one year. Which is why it is essential that you file ITR as early as possible, it provides you with a longer window to revise your errors.
• Interest on the Tax Amount
If the ITR is not filed on the due date, an interest rate of 1 percent per month is levied till the time ITR is filed. This said the interest is payable on the taxes after the deduction of TDS (tax deducted at source), TCS (Tax collected at source), advance tax and other tax credits provided by the law.
• No, Carry Forward of Losses
If you don’t file ITR within the due date, you will not be allowed to carry forward any losses under the window of “gains and profits of business or profession” or the “capital gains”. However, an unabsorbed depreciation or loss under the window of “income from house property” will be allowed to be carried forward.
• Delay in the ITR Processing
Once you file the return and its verification is duly completed, the Central Processing Centre of Income Tax Department processes the ITR. It is only after the processing the tax liability or the refund of the taxpayer is determined. Therefore, if you are trying to claim a refund, delay in filing ITR will only result in delayed receipt of your tax refunds.