Missed ITR Deadline- Here’s What You Should Do
If given a choice, most of us wouldn’t even want to pay tax on the income we earn. But we should. As citizens of India, it is our rightful duty to pay taxes as we are also consumers of the country’s public infrastructure and facilities, and income tax is an important source of revenue for the government. So, it is our responsibility to contribute towards building and maintaining the public infrastructure. Paying income tax and filing income tax returns on time ensure that.
The best time to start planning your tax-saving investments is at the beginning of the financial year. Most taxpayers procrastinate till the last quarter of the year, resulting in hurried decisions. Instead, if you plan at the start of the year, your investments can compound and help you achieve long-term goals. Remember, tax-saving should be an additional perk and not a goal in itself.
But, if you are reading this, it means you have already missed the last date to file the returns for the said A.Y. 2019-20. Being a registered taxpayer with the Income Tax department, a lot of reminder e-mails and text messages are send literally every other day to file your tax returns before August 31, 2019. The government had extended the last date for filing the returns for FY 2018-19 from July 31 to August 31. This was done in a bid to increase tax compliance and incentivise citizens to file their returns without being penalised.
Can you still file ITR?
The answer is yes, even after the extended return filing time period, you could still file your overdue tax returns for the previous financial year, but this obviously comes with a penalty for late filing. The penalty is levied as per Section 234F according to which an individual would have to pay a fine along with the tax liability. Please note that if the taxes have been paid and only filing the ITR is pending, then there will not be any Interest Implications.
What is the Penalty Amount?
In accordance to Section 139(1) of the Finance Act, if return after due date (belated return) is filed but before December 31, 2019, the penalty will be Rs 5000. In cases, where the returns are filed on or after January 1, 2020 but before the end of the Assessment Year (i.e March 31, 2020) the penalty shall be Rs 10,000. However, where the declared income is below Rs 500,000, the amount of penalty shall be Rs 1000. Along with the penalty, you may also have to pay interest at 1% per month or part of the month, on tax due under Section 234A. The interest rate is calculated from the end of the deadline to the actual date of filing returns on a simple interest basis.
How to file belated returns
The procedure to file belated returns is the same as filing the return on or before the due date. The only difference is while filing belated returns you have to select Return filed under section 139(4) from the given drop-down menu.
Once you have filed your returns, you will have to verify it as well (ITR-V). The IT department only starts processing your returns once you do so. You have 120 days from the date of filing to get the returns verified. You can e-verify the returns via multiple channels, such as the Income Tax website, Aadhaar OTP or net banking channels. Refunds, if any, will be processed only for returns that have been verified.
Our Suggestions for you
Even though the tax department has a provision for filing belated returns, it is best to adhere to the mentioned timelines. Although the above-mentioned solution might help you file the return every time you are late on filing your ITR, filing returns after the deadline may create some additional issues for you. Some of the issues in late filings are mentioned as below:
- Losses under any head of income other than those from house property cannot be carried forward if the taxes have not been filed before the due date. This becomes especially critical for individuals with operating business losses or that of capital gains
- Your refunds could get delayed further.
- The IT Department may take more time in processing your returns
- Not only would you incur a penalty plus interest on your tax obligation, it could also bring you under scrutiny
How does VSRK tax advisory help you with tax planning and filings?
We, at VSRK are a team of highly trained Taxation professionals. We are one of the best Tax Planning Company in Delhi providing Online Tax Advisory Services to all our clients. We are a well known name Tax Advisory Services in Delhi NCR.