A lot of confusion can be seen with the ordinary tax payer over Penalty of Rs 5000, if their ITR for Financial Year 2016-17 is not filed before 31st July 2017
Though it is recommended to follow all compliances within the due date, but you don’t need to rush up leaving everything behind, just because of this penalty clause.
Take a deep breath , and understand that the Penalty as proposed in budget speech of Finance Act 2017 is applicable from the date 01st April 2018 , this means , returns for the Financial year 2017-18 will only be attracting this penalty if not filed within due date as stipulated by the law and not ITR of F.Y 2016-17
In present circumstances, only an interest is applicable on the amount of tax, and no ad hoc penalty is applicable on the returns filed after 31st July,
So, Don’t Fall Prey to ill-informed rumours and decide on your Compliance as it is intended by the Government.
To Clarify the above matter, extract of the aforesaid section is hereby quoted as under
Fee for default in furnishing return of income.
234F. (1) Without prejudice to the provisions of this Act, where a person required to furnish a return of income under section 139, fails to do so within the time prescribed in sub-section (1) of the said section, he shall pay, by way of fee, a sum of,—
(a) five thousand rupees, if the return is furnished on or before the 31st day of December of the assessment year;
(b) ten thousand rupees in any other case:
Provided that 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.
(2) The provisions of this section shall apply in respect of return of income required to be furnished for the assessment year commencing on or after the 1st day of April, 2018.”