Income Tax Return e-Filing for AY 2019-20: It is mandatory for an individual below the age of 60 years to file tax returns if his taxable income is above the exemption limit of Rs 2.5 lakh.
e-filing of Income Tax Return 2019-20: Filing income tax returns is a daunting task for a first-timer. The word ‘tax’ may give goosebumps to early jobbers who are unfamiliar with the bulky Income Tax Act and its multitudinous sections. Despite the confusion, it is mandatory to file one’s tax returns under a defined set of circumstances.
However, the Central Board of Direct Taxes (CBDT) has recently announced that it has extended the income tax return filing deadline from July 31, 2019 to August 31, 2019 — something that will come as a relief to many taxpayers. The CBDT noted the delay in Form 16 issuance as the reason behind the extension of the ITR filing due date.
That being said, while the taxpayers have now got an extra month to file their returns, it’s still better to file ITRs well in advance to avoid glitches in the last-minute rush. More importantly, there are some consequences of filing ITR after the due date. Here’s a quick look at what happens when you don’t file your returns on time.
Who Should File Returns?
It is mandatory for an individual below the age of 60 years to file tax returns if their taxable income is above the exemption limit of Rs 2.5 lakh. For senior citizens above the age of 60 and super senior citizens above the age of 80, it is Rs 3 lakh and Rs 5 lakh, respectively.
Benefits of Filing Returns
It is not necessary to file your returns if your taxable income is below the Rs 2.5 lakh limit. However, you can still file your returns as your return statements act as a proof of your income and taxes paid, and may be a necessity while seeking a loan, applying for a visa, or carrying forward capital losses from the previous year. So, even if your income is not taxable, it would be wise to file your returns. However, do remember to file your returns before the extended deadline of August 31, 2019.
Why You Should File Your Returns Before The Deadline
As the idiom goes, the early bird catches the worm. Filing your returns on time has its benefits. It will give you enough time to collate all the documents required to file your returns. Tax saving proofs, Form 16, address proof, and bank statements are some of the documents crucial while filing one’s returns. Filing before the last day gives you the time to correctly assess your tax dues or refunds. Also, you will get a faster refund if there’s any excess tax paid. Lastly, it will ensure peace of mind for as you will be well ahead of the deadline. You will also avoid the late fee applicable at the rate of 1% rate per month on your tax dues.
What If You Miss The Deadline
If you miss the August 31 deadline, you will still be able to file your returns. A return filed after the due date is called a ‘belated return’. You are allowed to file your returns any time before the end of an assessment year. So, if you fail to file your returns by August 31, 2019, you can file it any time till March 31 2020. However, a belated return attracts a penalty prescribed under Section 234F of the Income Tax Act.
A penalty of Rs 5,000 will be levied if you file your returns after the due date, but before December 31 of the assessment year (AY). This penalty can go up to Rs 10,000 if you file the returns after December 31, but before March 31 of an assessment year. For small taxpayers, whose income is less than Rs 5 lakh, the maximum penalty will be Rs 1,000 for return filing delay.
So, you will have to pay penalties along with tax due at the prescribed rate if you file your returns after the due date. As an early jobber, you would not want to land in trouble with the Income Tax Department at the beginning of your career. If your taxable income is above the exemption limit of Rs 2.5 lakh in a year, make sure you file your returns before August 31.
(The writer is CEO, BankBazaar.com)