I guess I can safely presume that no one — I repeat, no one — enjoys filing his/her Income Tax Return. It probably is one of the most hated tasks ever created by mankind.
Firstly, you are made to part with a huge chunk of your hard-earned income to 'I-care-a-d***-about-you' Government.
And then, to add to the misery, you are made to fill-up and file 'one-of-the-most-complicated' forms ever.
Therefore, if there is no tax to claim as a refund or no further tax is payable (apart from that deducted by your employer), many are tempted to skip filing their income tax return. In fact, many genuinely believe that with employer having already deducted their tax, they don't need to file their returns.
Beware! This, neither may be as per the law nor is it a very good idea.
As per IT Act, only those whose gross total income (i.e. income BEFORE various deductions such as u/s 80C, 80CCC, 80D, etc...) is below the basic exemption limit (i.e. Sr. Citizens Rs.2.5 lakhs, Very Sr. Citizens Rs.5 lakhs and all Others Rs.2 lakhs) and don't have any losses to carry forward, are exempt from filing their IT return.
Rest all must file their IT returns.
What if you haven't?
Scenario 1: All taxes have been duly paid
You would be spared of any notice or penalty for non-filing if you file the returns before Mar 31st of the next year.
Scenario 2: All taxes have been duly paid but return is not filed even by Mar 31st of the next year
You get one more year to file your returns. But you could probably be penalized a sum of Rs.5000 if your excuse for non-filing is not genuine.
Scenario 3: Some taxes are still to be paid
Penalty @1% p.m. will be levied on the amount payable w.e.f. April or the due date of Advance Tax whichever is applicable
Wait! That's not the end of the story.
Apart from the aforesaid penalties,
- Late returns cannot be revised if later you notice some error (Only returns filed before the due date can be revised)
- If any refund is due, the same would get delayed
- You cannot carry forward any losses incurred w.r.t. business or long-term / short-term capital gains during the year, for set-off in future years (losses on house property can, however, be carried forward).
And then, to add to the misery, you are made to fill-up and file 'one-of-the-most-complicated' forms ever.
Therefore, if there is no tax to claim as a refund or no further tax is payable (apart from that deducted by your employer), many are tempted to skip filing their income tax return. In fact, many genuinely believe that with employer having already deducted their tax, they don't need to file their returns.
Beware! This, neither may be as per the law nor is it a very good idea.
As per IT Act, only those whose gross total income (i.e. income BEFORE various deductions such as u/s 80C, 80CCC, 80D, etc...) is below the basic exemption limit (i.e. Sr. Citizens Rs.2.5 lakhs, Very Sr. Citizens Rs.5 lakhs and all Others Rs.2 lakhs) and don't have any losses to carry forward, are exempt from filing their IT return.
Rest all must file their IT returns.
What if you haven't?
Scenario 1: All taxes have been duly paid
You would be spared of any notice or penalty for non-filing if you file the returns before Mar 31st of the next year.
Scenario 2: All taxes have been duly paid but return is not filed even by Mar 31st of the next year
You get one more year to file your returns. But you could probably be penalized a sum of Rs.5000 if your excuse for non-filing is not genuine.
Scenario 3: Some taxes are still to be paid
Penalty @1% p.m. will be levied on the amount payable w.e.f. April or the due date of Advance Tax whichever is applicable
Wait! That's not the end of the story.
Apart from the aforesaid penalties,
- Late returns cannot be revised if later you notice some error (Only returns filed before the due date can be revised)
- If any refund is due, the same would get delayed
- You cannot carry forward any losses incurred w.r.t. business or long-term / short-term capital gains during the year, for set-off in future years (losses on house property can, however, be carried forward).
