Is Penalty on Late Filing of Income Tax Return Compulsory?

It is beyond any doubt that the nation is a vast family that needs funds to be run smoothly and in an unhindered way.

Everyone who conducts any sort of economic activity in India; be it a business, a job or a profession; and earns or gets a certain income out of it, above the threshold limit is subject to payment of the income tax.

All individuals whose income pertaining to previous year exceeds the minimum slab, are supposed to file their income tax return as per the section 139(1) of Income Tax Act, 1961.

#1. What is the due date for ITR filing for individuals?

As per the Income Tax Act 1961, all the individuals who are subject to payment of income tax must file their Income Tax Return latest by 31st of July every year.

#2. How seriously are the tax compliance rules taken in India?

It is an old malady in India that despite recurrent reminders, there are certain tax assessees who turn a deaf ear and fail to meet the deadline for Income Tax Return Filing. They are used to file late returns or forget to file the return of income.

This has happened because, before the current provision of income tax, penalty on late filing of return was not mandatorily enforced by the Department. Therefore, tax assessees used to take the provision of timely filing of return for granted.

#3. What if Income Tax Returns are not filed on time?

No doubt, neglecting the tax compliance due dates has become a habit of many Indian citizens. However, such non-compliance will now pose a huge consequence for all the defaulters. 

From the financial year 2017-18 onwards, a new section has been introduced, i.e. Section 234F of Income Tax Act-1961, wherein the failure to meet ITR filing due date will attract a mandatory penalty of ₹5,000/- if a late return is filed on or before 31st December of the assessment year. 

And this makes it truly imperative for the taxpayers to abide by the deadline for the Income Tax Return filing, which is 31st July 2018.

#4. What if income tax return not filed even before 31st December of the assessment year?

In spite of attracting the penalty of ₹5,000/-, if the process of ITR filing online is delayed at the end of the taxpayer, beyond 31st of December, the rigorous penalty will be extended to ₹10,000/-.

Thus, from this year onwards, a procrastination in fulfilling e-filing of Income Tax Returns will literally mean incurring a huge sum as fine.

#5. Is there any exception regarding the amount of penalty for late ITR filing?

Yes. If the total income of the person doesn’t exceed ₹5 lakhs, the late fee shall not exceed beyond ₹1,000/- u/s 234F(1.b) of Income Tax Act-1961.

In case you need other guidance regarding Income Tax Return filing, feel free to contact us at 8881-069-069.

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