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Things That Will Happen If You Fail To File Income Tax Return (ITR) India


What Happens If I Don’t File ITR?

“Its every Indian citizen’s duty to File the income tax returns on or before the due dates as per section 139(1)”. In case, any individual hasn’t filed their income tax returns in India before the prescribed date then he or she can submit their belated IT returns within the time period of two years that is from the end of FY. And if you didn’t file an income tax return in India even after that prescribed time period then it is said to be time-barred. According to Chapter XXII of the Income-tax Act, 1961, tax nonpayment can lead to hefty penalties along with evaded tax and in some cases, it may be penal, meaning even the concerned authority can land the person in jail of a time term of 7 years.
If a taxpayer misses the ITR due date, his/her returns will be processed late and the refund amount, if any, will be released late.  A late filing fee will be applicable for filing your returns after the due date under section 234F. Late Filing Fees u/s 271F of the IT Act amounting to Rs 10,000 for AY 2020-21 where such return is filed beyond the due date u/s 139(1) of the IT Act. However, if the total income of the taxpayer is upto Rs 5,00,000, such late fees would be restricted to Rs 1,000. The maximum penalty is Rs. 10,000. If you file your ITR after the due date (30th Sep) but before 31 December, a penalty of Rs 5000 will be levied.
The following cases may be counted as Non-Compliance/ Not Filing Income Tax Return India:

Not Filing Income Tax Return in India

If an individual who is eligible to submit the income tax returns fails to submit the income tax return under the Section 139, subsection (1) of Income Tax Act then the respective authorized officer can issue the person with a penalty notice.
Following are the list of penalties that will be imposed for Late Filing of Return as per the Section 234F:

  • Rs.5,000 is levied for filing the ITR after the prescribed date but earlier 31st December of the AY.
  • Rs. 10,000 is levied for filing the ITR between 31st December and 31st March of the AY.
  • And in case, the total income of the person is less than Rs. 5,00,000 the penalty of Rs.1,000 is levied up to 31st March of the AY.
  • As per section 234 A/B/C an interest penalty is also imposed for the above late filing fees for the ITR.

Note that after the end of an AY, any individual will not be able to file the Income Tax Returns.

Not providing PAN or quoting the wrong PAN

For not providing your PAN number at the time of employment, 20% TDS will be deducted instead of the regular 10%. And for incorrect PAN details, a penalty of Rs 10,000 is imposed. Presently, The basic exemption limit for ITR filing for resident individuals who are below 60 years is Rs 2.5 lakh

Not checking Form 26AS 

For any mismatch or wrong details in form 26AS can result in severe punishment.

Not paying Tax as per self-assessment

Under Section 140 A (1) of Income Tax Act, if any person fails to pay either wholly or partly interest or self-assessment tax then that individual will be charged with a penalty by the assessing officer.

Concealing Income to evade tax

As per section 271(C) of the Income Tax Act, the penalty for providing wrong information or details of your income or hiding income tax will be 100% to 300% of the tax evaded. 
According to section 271 AAB, the penalty may vary depending on the different scenarios:

  • If the taxpayer accepts the unrevealed income then only 10% of the previous year’s undisclosed plus interest will be imposed.
  • If the taxpayer does not bring out the undisclosed amount but brought in the return of income provided in the last year, a penalty of 20% of the undisclosed amount plus interest will be imposed.
  • If the amount is unrevealed in the last year then the minimum 30% and maximum 90% penalty can be imposed.

Not Complying with the income tax notice in India

If a taxpayer fails to file the notice issued by IT department as per Section 142(1) or 143(2) then the assigned officer can issue a notice, stating to file the IT return or to submit all the details of assets and financial obligation in writing format.
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