31st March’ 2020: The last date for Income Tax return u/s 139(4) for Financial Year 2018-19. Many people came up with a query that what will happen if we do not file the Income Tax Return by the aforementioned deadline. There are many benefits of filing the Income Tax Return. But, here we are discussing only the adverse consequences of Non-Filing of the Income Tax Return which includes Penalty under Section 271F of Income TAx Act, 1961, Interest under Section 234A of Income Tax Act, 1961, Non-Carry Forward of Losses, Best judgment assessment (Assessment under section 144), Claim of Refund of Taxes, Penalty for Concealment of Income and Prosecution for Failure to Furnish Return of Income.
If a person fails to furnish return before the end of the relevant assessment year, the assessing officer may levy a penalty as follows:
|Date of Filing||Fees Leviable|
|If the return is furnished after the due date of filing but on or before the 31st day of December.||Five thousand rupees|
|In any other case||Ten thousand rupees|
|Note: If the total income of the person does not exceed five lakh rupees, the fee payable under this section shall not exceed one thousand rupees.|
Default in the furnishing of the Income Tax Return may attract Interest u/s 234A. If there are any taxes which are unpaid, penal interest @ 1% per month or part thereof will be charged till the date of payment of taxes.
You will not be able to carry forward losses if the return of income is not filed within due date.
However, the loss under the head “Income from house property” can be carried forward even if the return of income/loss of the year in which loss is incurred is not furnished on or before the due date of furnishing the return, as prescribed under section 139(1).
The Assessing Officer is under an obligation to make an assessment to the best of his judgment in the following cases: –
Thus, Non-Filing of the Income Tax Return may result in the Best Judgement Assessment. This is an assessment carried out as per the best judgment of the Assessing Officer on the basis of all relevant material he has gathered.
In case your tax payable is less than the TDS already deducted, you can claim the refund of such excess TDS by filing your Income Tax Return.
You must file your Income Tax Return to claim the refund of TDS.
Further, you are eligible for Interest @0.5% per month or part of the month on refund amount as per Section 244A.
If you have taxable income and do not file the return of Income you may end up paying penalty for concealment of Income.
In such cases Penalty u/s 270A is for under-reporting and misreporting of income will be levied.
Thus, where no return of income is furnished and later you are assessed at income higher than maximum amount not chargeable to tax you may end up paying a heavy penalty.
In case you fail to furnish the return of Income, don’t be surprised if you receive notice of prosecution u/s 276CC.
Section 276CC provides for rigorous imprisonment for a term up to 7 years and fine.
Don’t wait and get your Income Tax Return filed!