While there are many benefits of filing your Income tax return on time, Not filing Your ITR may attract the ire of the Income Tax department. Penalty, Interest, Best Judgment Assessment and Prosecution are some of the consequences you may face for not filing your income tax return. This article throws light on the consequences of not filing ITR.
Late Fee under section 234F
If the Assessee fails to furnish the ITR within the time limit prescribed as per section 139(1), he is liable to pay late fee of Rs.5000/- if the person files the return up to 31st December of the relevant Assessment year. If the delay is beyond 31st December, late fee of Rs. 10,000/- shall be applicable. However, If the Total Income does not exceed Rs.5,00,000/-, late fee payable shall be Rs.1,000/-.
Non-Carry Forward of Losses
If the Assessee fails to file his return of Income, he cannot carry forward any losses incurred during the previous year.
Claim of Refund
If there is any TDS deducted and the tax payable is less than the TDS, the assessee would not be able to claim the refund of it unless he files the ITR.
Best Judgment Assessment
The Assessing Officer is under an obligation to make an assessment to the best of his judgment in the following cases: –
- If the taxpayer fails to file the return required within the due date prescribed under section 139(1) or a belated return under section 139(4) or a revised return under section 139(5).
- If the taxpayer fails to comply with all the terms of a notice issued under section 142(1) or fails to comply with the direction issued under section 142(2A)
- If the taxpayer fails to comply with all the terms of a notice issued under section 143(2)
Best Judgment assessment will be done by the assessing officer on the basis of information or relevant documentation or material gathered by him.
Interest under section 234A
Interest at the rate 1% per month or any part thereof shall be applicable on any tax to be paid which remains unpaid till the date of payment of such taxes.
Penalties and Prosecution
Non filing of return amounts to concealment of income and thus penalty under section 270A can be levied for not reporting taxable income. Also, as per section 276CC, you may also be liable for imprisonment which may extend for a period up to 7 years.
Thus utmost care must be taken to file the Income Tax returns with correct and complete income details and within prescribed time limit to avoid penal consequences.
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