Income Tax Return 2019: Do this to avoid late fee, penalty and prosecution while filing ITR

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Updated: July 29, 2019 2:03:12 PM

Income Tax Return Last Date: In order to avoid a fee or penal interest, make sure you have paid the due taxes and filed the ITR by the due date.

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Income Tax Return 2019-20 Last Date: The tax filing season is on and all those who are required to mandatorily file the income tax return (ITR) need to complete the ITR filing process by the due date. If one fails to file the ITR, then one will have to pay a fine or penalty if the tax is due to the government. The ITR filing last date for the assessment year 2019-20 ( financial year 20-18-19) is July 31. For those not filing ITR in spite of repeated notices from the Income Tax Department, prosecution proceedings may also be initiated against them.

Unlike in the previous years, missing the due date or filing ITR for the AY 2019-20 even by a day will result into a financial loss. If one fails to furnish the ITR by July 31 2019, the filing may still be done till March 31 2020, however, there will a default fee. “As per section 234F if return is not filed till the due date but is filed till 31 December then fees of Rs. 5,000 is to be paid and if return is not filed even after 31 December then fees of Rs. 10,000 is to be paid. However, where total income of the person does not exceed Rs. 5,00,000 then fees under section 234F shall not exceed Rs. 1,000,” informs Dr. Suresh Surana, Founder, RSM Astute Consulting Group.

The ITR filed after the due date but anytime till March 31 of the same assessment year is treated as a belated return. If one fails to file ITR even after the end of the assessment year, the assessee will have to wait for a notice from the Income Tax Department.

Further, if the assessee owes tax to the government, there will be interest payable on the amount of unpaid tax. “In addition to the above late fees, if there is unpaid tax, interest under section 234A at 1 per cent per month or part thereof will be charged on the tax payable till the date of payment of taxes. Interest under section 234B and 234C may also apply,” informs Archit Gupta, Founder & CEO ClearTax. The tax liability will be applicable from the very next date after the due date i.e. July 31 till the ITR is filed by the taxpayer.

“As per section 276CC, if person willfully fails to furnish return in due time, then he shall be punishable with rigorous imprisonment for a term which shall not be less than 6 months but which may extend to 7 years and with fine in case where amount of tax sought to be evaded exceeds Rs. 25 lakh. If amount of tax sought to be evaded exceeds Rs. 3,000 but is up to Rs. 25 lakh then person shall be punishable with rigorous imprisonment for a term which shall not be less than 3 months but which may extend to 2 years  and with fine,” says Dr. Surana.

Only those individuals with income below the exemption limit are not required to file the ITR even though they would have earned income during the financial year. The basic exemption limit varies as per age. For those below the age of 60, if the income is below Rs 2.5 lakh, the ITR need not be filed.

“All individuals who have Gross Total Income (before deduction under chapter VI A, including section 80C / 80CCD / 80D / 80TTA / 80G) exceeding Rs. 2.5 lakh are required to furnish their income tax returns. Further, for computing Gross Total Income for this purpose, the amount exempt from long term capital gains u/s 10(38) and deductions under section 10, 10A or 10B or Chapter VI-A need to be added back,” says Dr. Surana.

For those above age 60 and below 80, the basic exemption limit stands at Rs 3 lakh and for those above 80 years, the limit is Rs 5 lakh. However, important to note that if a taxpayer is taking the benefit of section 87A and using deductions under the I-T Act to reduce his taxable income but ends up paying Nil tax, filing of ITR is necessary in that case.

Therefore, in order to avoid a fee or penal interest, make sure you have paid the due taxes and filed the ITR by the due date. Even if there are certain confusions regarding the ITR figures, filing within the due date helps as a Revised ITR can be filed later on, thus saving on the fine and penalty. However, Revised Return also has a limitation. “The taxpayer can rectify his mistake by filing a revised return under section 139(5). However, he will not be allowed to file a revised return after the income tax assessment is complete on the basis of the original return filed before,”cautions Gupta.

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