There may be heavy fine and jail for not filing income tax return, know the rules of income tax law
Income Tax The last date for filing income return is July 31, 2022. In such a situation, if your annual income is taxable and you have deliberately not filed income tax return, then you may be in trouble. Under the Income Tax Act, there is a provision to levy heavy penalty from those who do not file income tax returns. Along with this, there is also a rule of jail. Let us know what can happen if the return is not filed.
If the income exceeds the exemption, then it is necessary to file the return
Income tax is the tax you pay for your personal income. According to section 139 of the Income Tax Act 1961, it is mandatory for every person whose income exceeds the existing limit of exemption from income tax. Apart from this, a person may also have to file a tax return as a legal heir or representative of a deceased.
Disadvantages of not filing income tax return
A person who should lawfully file an income tax return, if he does not file an income tax return, is liable to a fine of Rs 5000 during that assessment year. Interest under sections 234A, 234B and 234C is also levied on the person in case of non-filing or late filing of tax return.
Imprisonment up to 7 years possible
Under the Income Tax Act, non-filing of returns can result in imprisonment of 6 months to 7 years. However, it is not for everyone. The Income Tax Department can sue only in cases where the tax amount exceeds Rs 10,000. This law does not apply in all cases. However, before this the Income Tax Department sends a notice to the individual to pay the tax.
penalty and interest
If you have not filed ITR by mistake, then the penalty amount will be 50% of the total tax liability. If not filed intentionally then it will be 200%. You will have to pay this penalty on top of the tax liability. Along with this, interest at the rate of 1 percent is also to be paid on the tax liability. You will have to pay the interest rate from the day the last date for filing ITR ends.
Facility to pay late fee
If you haven’t filed your return by 31st July 2021, you still have a chance. The late fee for filing income tax return after December 31 of any year becomes Rs 5000. However, if your total income is less than Rs 5 lakh, then you have to pay a maximum penalty of Rs 1,000.
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