The ponderance of what might happen if one fails to submit their income tax return (ITR) is a commonly shared concern among taxpayers. The punctual filing of your ITR holds paramount importance in order to evade penalties and tardy fines, while also reaping various benefits. Should you find yourself questioning the aftermath of not filing your ITR, allow me to illuminate the potential repercussions that lie ahead:
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Dawdling in filing brings forth late filing fees: Non-compliance with ITR submission may render you liable for late filing fees amounting to Rs 5,000 under Section 234F. However, if your total income falls below Rs 5 lakh, the late fees are constricted to Rs 1,000. Should your gross income descend below the basic exemption limit, the late submission shall remain devoid of penal consequences.
Embarking upon the realm of interest on tax amount: Besides the penalties, you shall be levied a 1 percent interest per month or part of a month (in accordance with Section 234A) on the outstanding tax amount. This interest accrues from the due date of your return until the actual filing date. The protraction of your procrastination shall entail a commensurate amplification in the interest dues.
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Adversity in benefit acquisition: A failure to declare investment or business-related losses in your ITR hampers your ability to carry them forward for future gains offsetting and diminution of your tax liability. It should be noted, however, that losses concerning a house property may still be carried forward in such an eventuality.
Deprived of the luxury of ITR revision: Timely filing allows for multiple revisions of the original return. However, the tardiness in submitting the initial ITR deprives you of this privilege. Therefore, meticulousness and vigilance are vital when finalizing a belated ITR submission.
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Steep penalties loom: The repercussions of not adhering to ITR submission timelines can give rise to suspicions of tax evasion by the tax authorities. This suspicion can culminate in a penalty under Section 270A for under-reported income, amounting to 50% of the tax evaded due to non-filing. Additionally, the offenders may find themselves susceptible to imprisonment, ranging from three months to two years, and accompanying fines that correspond to the evaded tax quantum.
It bears immense significance to file your ITR within the stipulated time frame in order to circumvent these potential consequences.
