Income Tax Return Deadline Tomorrow: Know About The Consequences Of Missing It
The late fee for the taxpayers whose annual income is up to ₹ 5 lakh is ₹ 1,000. If your annual income is more than ₹ 5 lakh the late fine is ₹ 5,000.
New Delhi: The due date for income tax return (ITR) filing for the financial year 2021-22 or assessment year 2022-23 is July 31, 2022. If you have already filed the return or manage to file it before the due date, it's well and good. But, what happens if you fail to file the ITR before the July 31 deadline? If you miss the July 31 deadline, you can still file the return by December 31, 2022. However, you will have to pay a late fee. It will also have some other financial consequences.
The late fee for the taxpayers whose annual income is up to ₹ 5 lakh is ₹ 1,000. If your annual income is more than ₹ 5 lakh the late fine is ₹ 5,000.
However, if your gross total income does not exceed the basic exemption limit, you will not be liable to pay a penalty for the late filing.
The basic exemption limit depends on the income tax regime you choose. Under the old income tax regime, the basic tax exemption limit stands at ₹ 2.5 lakh for taxpayers below 60 years of age. For people between 60 and 80 years of age, the basic exemption limit is fixed at ₹ 3 lakh. For people above 80 years of age, the exemption limit stands at ₹ 5 lakh.
Under the new concessional income tax regime, the basic tax exemption limit stands at ₹ 2.5 lakh, irrespective of the age of the taxpayers.
Gross total income refers to the total income before taking into account the deductions under sections 80C to 80U of the Income Tax Act.
Apart from the late fee charges missing deadlines have several other implications. If you miss the deadline you will be required to pay interest on the late payment of taxes.
"There could be some tax payable while filing ITR for example interest and dividend. TDS deducted at 10 per cent, but you are in say 20 per cent or 30 per cent tax slab, hence the differential amount of tax is to be paid with interest as per Section 234 A at the rate of 1 per cent per month," said Sudhir Kaushik, Co-Founder and CEO, TaxSpanner.
If you file the return before the due date you can just deposit the outstanding tax. However, if you miss the deadline, you will be required to deposit the outstanding tax along with the interest, retrospectively from July 31. If the outstanding dues are paid after the 5th of any month, the interest of the full month will have to be paid at a rate of 1 per cent per month.
A taxpayer can reduce liability by offsetting the losses from business operations of the sale of property against other incomes. However, the losses can only be carried forward if the ITR is filed before the due date.
"Carry forward of losses (other than loss from house property), if any is not allowed if you miss the due date. Losses on sale of property/shares/capital assets those were forced to sell during corona should be declared and filed before the due date," said Sudhir Kaushik, Co-Founder and CEO, TaxSpanner.
As per the Income Tax law, business loss (other than speculative business) can be set off against any head of income except income from salary. Any unadjusted loss can be carried forward for eight financial years immediately succeeding the current financial year and set off against any business income, as prescribed. For example, business losses incurred in the financial year 2020-21 can be set off against business income in the financial year 2021-22 and subsequent years.
You may receive notice from the Income Tax Department for not filing or mismatch.
On the possibility of notice from the Income Tax Department, Kaushik said, "during Covid pandemic many individuals have invested in equity as we are witnessing while filing ITR and AIS (annual information statement). So tax notices for mismatches of income/loss declared can also be expected."
In case you miss the 31st July deadline, the last date for filing the belated income tax return for the financial year 2021-22 is 31st December 2022.
In case you miss even the 31st December 2022 deadline, for refunds and losses, you would be required to file an appeal for condonation with the commissioner of income tax of your ward for refund and losses carried forward. "If the reason is bonafide you may get the permission," said Kaushik.
There is a huge penalty if you owe taxes. "If you find additional income in AIS or other documents which were not declared in original return or not filed at all then you have to pay 50 per cent additional tax of this pending tax amount if filing updated return within a year and 100 per cent additional if filing after one but before two years," he said.
In case you miss the 31st December deadline, a new form ITR U has to be used for updated return and give reasons for updating your income. The reasons could be: return previously not filed; income not reported correctly; wrong heads of income chosen; reduction of carried forward loss; reduction of unabsorbed depreciation; reduction of tax credit u/s 115JB/115JC; wrong rate of tax and others.
(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)
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