ITR has to be filed by every businessman. Many taxpayers have the habit of paying their income tax returns late. This includes consequences like a penalty which is charged by the Income Tax Department of India.
Here are some effects of filing late Income tax returns:
1. Penalty
According to Section 234F, a penalty fee will be charged from individuals who file their income tax returns late. A taxpayer with an income of more than Rs. 5,00,000 will be charged a penalty of Rs. 10,000 after the deadline, which is 31st March. Whereas taxpayers with income of less than Rs. 5,00,000 have to pay a penalty of Rs. 1,000.
2. Refunds
If the taxpayer pays the return within the due date, he will receive his refunds also earlier against the excess amount paid.
3. Interest
According to section 234A, 1% interest is charged every month on the amount which is not paid or on the remaining tax. The calculation will start as soon as the due date has passed. The taxpayer cannot file for ITR until and unless the complete tax has been paid, so more the dealy, more the taxpayer has to pay.
4. Carrying Forward the Loses to next year
It is important for the business owner to file the income tax return on time if they have incurred some losses in a financial year. These losses cannot be carried forward to the next year (except losses from house property).
5. Not filing the revised ITR on time
If you feel you have made an error while filing the tax returns, it has to be corrected immediately. Delay of which might make you pay a penalty. The time period of filing the revised ITR which currently was two years has been changed to a year from the financial year 2017-18.
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