It is very much important to file an income tax return. People are satisfied with the fact that their income tax has been paid by them, and now there is no headache for them in an upcoming way, but that is not the end of the process. To levitate the real benefits of paying your income tax, there are some points which should be understood even after paying your income tax and filing your income tax returns:
Note: Income Tax returns for the Financial year 2022-23 (the Assessment year 2023-24) are to be filed by July 31st 2023.
Interest Loss on the Refunds
When you ask for refunds in your returns when paid any advances, you would be losing some amount of interest which is 6% right now paid by the income tax department. Any late demand for a refund would make lose interest even if you asked for it a day after the elapsed time.
Losses To be Carried Forward
Belated return is not subject to carry forward the losses except house property losses. As an official told, “Losses under the following heads of income: Income from business and profession including speculation business, capital gains, and income from other sources cannot be carried forward in case a belated return is filed by the taxpayer. The return filer will not be allowed to carry forward these losses even if all taxes have been paid in time if the return is belated,”
When Tax has not been Paid Even after the Due Date
If you have any unpaid tax liability, filing your return after the due date would result in a levy of penal interest @ 1% per month from the due date of filing the income tax return till the actual date of filing. This would be a heavy and avoidable payout. What is more, tax authorities can initiate prosecution if the return is delayed beyond the relevant assessment year and the amount of unpaid tax exceeds Rs. 3,000, he told.
If Relevant Assessment Year Ends and Still Returns are not Files
If you do not file your tax return even by 31st December of the relevant assessment year but no taxes are due, a penalty of Rs. 5,000 can be levied by the tax authorities if you are unable to provide a reasonable cause for the delay.
Section 234F has been inserted for charging the fee for default in furnishing Income Tax returns:
If any assessor fails to furnish a return by the due date specified in section 139(1) then he shall be liable to pay the fee of :
- Rs. 5,000 if the return is furnished after the due date but on or before 31st December of the assessment year.
** If the total income of the person does not exceed Rs. 5,00,000 then the fee payable shall not exceed Rs 1,000 under section 234F.
