6 Reasons to file your income tax returns on time

Income Tax season is due and chaos is already in the air. Although India has an astonishing number of income tax filers with more than 5.5 Crore assesses who filed their returns last year a lot of them failed belated rerutns and paid for the delay. Here we have tried to put out six reasons to file your Income Tax returns on time. Avoid the last minute hassle by filling you Income Tax return before the due date and avoid the harsh consequences below:

Late Fees

In case you have defaulted in filing your income tax return on time you will be required to pay a late fees of:

5,000 INR in case the return is furnished on or before 31st December of that assessment year

10,000 INR in case the return is furnished beyond that

Note: Provided that in case the total income of that person does not exceed five lakhs the maximum late fees shall be 1,000 INR.

Penalty (Section 272A)

If a person who is required to file the return has failed to file the return on time, he shall pay a penalty of INR 100 per day for the period during which the failure continues.

Interest on Tax Due (Section 234A)

Where a person who was required to file a return has failed to do so will be required to pay a simple interest of 1% for every month or part of the month thereof on the amount of tax outstanding from the due date or returns to the day in which return was filed. Additional interest under section 234B & 234C can also be levied in case the assesse was subject to advance tax provisions and had failed to pay the advance tax on time.

Losses cannot be carry forward

Business Losses, losses from capital gains and losses from owning and maintaining race horses of the previous year cannot be carried forward unless the return has been filed on time, however unabsorbed depreciation can be carried forward even in case of belated returns. Also carry forward losses pertaining to year before the previous year in which the return was filed on time can be carried forward in case of belated returns too.

Disallowance of Deductions (Section 80 AC)

No deductions under section 80IA, 80IB, 80IC, 80ID, 80IE or deductions belonging to Part C: Deductions in respect of certain incomes will be allowed unless the returns are filed on or before the due date.

Chances of Best Judgement Assessment (Section 144)

This is the most dangerous part of non-filing of returns where the assessing officer gets the right to make an ex parte assessment also known as best judgement assessment. In this case the assessing office will compute the tax payable by the assesse by making enquiries and information gathered on his own motion.

Although the above article put out compelling reasons about why you should file your returns but you should know that not everyone is required to file their return of income. Check out this article about who is required to file their income tax returns.

If you require any assistance in planning your tax or filing your income tax returns please reach our experts at +91-7008804070