New Delhi: With the government trying to honour taxmen across the country through a seamless and faceless taxation system and encouraging more people to pay taxes, it is important for you to understand the repercussions of not paying taxes since it is compulsory to file an income tax return (ITR). As a result of the Covid-19 outbreak, the government has already provided relief to the common man by extending the time for various financial transactions. The government has also extended the deadline for ITR filing, including ITR for the financial year 2018-2019.

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Did you know that non-filing of returns can land you in jail? Yes, the Income-tax department can launch prosecution against you in absence of non-filing of ITR returns. It can also ruin your chances of getting a loan or acquire a visa for travel purposes besides creating hurdles at the time of property registration.

Here are the legal provisions and implications in case you if don’t adhere to the last deadline.

What does the existing law state?

According to the existing law, ITR returns cannot be filed for more than one year at a time. For instance the due date for filing ITR in 2019 was 31st July 2019 for most tax payers barring those covered under mandatory audit provisions.

However, the due date is not the last date for filing the reruns and in fact, ITR for 2019 can be filed by 31st March 2020. This will attract a payment of late fee and interest in case the full liability of tax was not fully discharged by 31st March 2019.

What is the date now?

This year as a result of coronavirus pandemic, the last date for filing for 2019 was initially extended from 31st March 2020 to 30th June 2020 and then again to 31st July and lastly till 30th September 2020.

It is unlikely that the government will offer any further extension since the economy has opened up and running in full steam.

What happens in case of non-filing of returns?

In case you failed to file your old ITR , it is suggested to avail the extension benefit now because in absence of any further extension you may end up losing the opportunity to file your old ITR.

As you have already missed the due date of 31st July 2020, you will have to pay a late fee of Rs. 10,000/- while filing your old ITR unless your total income is below Rs 5 lakhs in which case in which case the amount of penalty gets restricted to Rs. 1,000.

Also, note that apart from the late fee you also will have to pay interest for delay in payment of unpaid taxes as well as for delay in filing of your ITR in case the entire tax liability was not discharged before 31st March 2020 either by way of advance tax or through deduction of tax at source.

With transactions, getting computerised,  the government already has the data of your income without you filing your ITR. So in case you fail to meet the last deadline, there might be serious implications.

The tax department charges a minimum penalty which may be equal to 50 per cent  of the tax which has been avoided by you. This will be in addition to the liability to pay the interest till the date you chose to file the returns after getting notices from the tax department.

Moreover, the income tax department can conduct prosecution against you for non filing of ITR. As per the tax laws, a minimum three years of imprisonment term which can also get extended up to seven years. However,  you cannot be prosecuted in case the amount of tax sought to be avoided does not exceed Rs 10,000.