- 8 FEB 2018
Disadvantages of not filing income tax returns
Every person whose taxable income is more than the basic exemption limit is required to file an income tax return every year. The due date for filing income tax return depends upon legal status of the assesse. The Due date for companies and assessees liable for tax audit is 30th September. For the others, the due date of filing tax return is 31st July. Not filing income tax return can have serious repercussions for a taxpayer. Some of these include:
Carry forward of losses
Every assessee is entitled to claim set off for any losses incurred against income earned during relevant financial year (subject to income tax provisions and rules). Further, an assessee is also entitled to carry forward such losses which could not be set off in a particular financial year.
However, if an assessee does not file his return of income before the due date then such losses cannot be carried forward.
Deductions under Chapter – VI A
An assessee is entitled to claim deductions for investments in Provident fund, NSC, life insurance premium paid, medical premium paid, etc. However, the same cannot be claimed if the assessee does not file his return of income within the specified due date.
Interest under Section 234
ITR includes the sources of income earned during the previous year and the tax liability arising from the same. Income tax liability is required to be paid as per income tax provisions. in case of delay in payment of tax liability, Interest is levied at 1% per month or part of the month.
In case of delay in filing income tax return without any reasonable cause, penalty for Rs. 5,000 may be levied. The Assessing Officer does have the power to waive of such penalty. Also, reasonable opportunity of being heard is given to the taxpayer before imposition of penalty. But, it is always better to adhere to the rules instead of getting into the hassles of hearings.
Loss in interest on refund
Assessees are eligible to claim refund in case tax paid is greater than the amount of tax liability. Refund is required to be processed and paid within time limits specified in the income tax act. In case of delay in payment of refund, department is liable to pay interest on the same.
If return is filed after due date, then interest on refund is reduced for each day of delay.
Tax returns prove to be of prime importance while considering tax payer’s credit worthiness. Tax returns are mandatory requirements for any loan application, visa application, etc. Hence, non-filing or delayed filing of income tax return prove to a hindrance for the assessee in more ways than one.
Also, it is important to note that delay in filing of income tax returns can be condoned by the assessing officer provided there is reasonable cause for delay.
- 18 OCT. 2018
5 Key financial lessons to learn from Dussehra
Justin and Ajay are very good friends since childhood. Ajay joins Justin every year on Christmas celebration and Justin would join Ajay in Dussehra and Diwali celebrations. Like every year on Dussehra, they both would be enjoying Garba that happens in their society to the fullest.read more