After the end of a financial year, earning individual and entities need to calculate total income earned during the year and report it through Income Tax Return (ITR) within the due date.
After the end of a financial year, earning individual and entities need to calculate total income earned during the year and report it through Income Tax Return (ITR) within the due date. ITR filing will be mandatory for you, if your earning is above the exemption limit of Rs 2.5 lakh or there was any TDS.
If you are a super senior citizen or your income is less than Rs 5 lakh, you may file your ITR offline. Otherwise, you have to file your return online and verify it either offline by sending the signed ITR Verification Form (ITR-V) through ordinary post/speed post to Bangalore, where the Centralised Processing Centre (CPC) of the Income Tax Department is located or you may verify it online through digital signature or Aadhaar OTP to complete the filing process.
Unless extended, the due date of e-filing of Income Tax Return 2019-20 is July 31, 2019 for Body of Individuals (BOI), Hindu Undivided Family (HUF) and Association of Persons (AOP) including businesses whose Books of Account are not required to be audited, while the due date for the businesses requiring audit is September 30, 2019.
Filing ITR before the respective due date is very important, because you have to face many consequences if you file it after the due date or don’t file it at all.
Some of the disadvantages of not filing ITR within due date are as follows.
Penalty: If you miss the ITR due date, you have to pay Rs 5,000 penalty (Rs 1,000 if taxable income is less than Rs 5 lakh), provided you file it within December 31. For further delay, you have to pay penalty of Rs 10,000.
Interest on tax payable: In case there is tax payable, as per the section 234A of the Income Tax Act, you have to pay penal interest of 1 per cent per month on the amount of unpaid tax till the date of payment of taxes.
Prosecution: If you willfully don’t pay tax and don’t file your ITR even after getting notice u/s 142 and 148 of the Income Tax Act, you may face prosecution u/s 276CC of the Act.
No carry forward of losses: You can’t carry forward the losses to get it adjusted against profits/gains of future years, if you fail to file your ITR within due date.
Trouble in getting refund: If you miss the ITR due date, your Return will be processed late and the refund amount, if any, would be released late.