Simply 3 days left for submitting ITR, what occurs if you happen to miss the deadline

Earnings tax returns (ITR) submitting is likely one of the most necessary monetary duties yearly. The deadline to file ITR for the monetary yr 2020-21 is December 31.

The due date for ITR submitting for the monetary yr 2020-21 (the evaluation yr 2021-22) has been prolonged twice – first from the standard deadline of July 31, 2021, to September 30, 2021, after which to December 31, 2021.

The December 31 deadline is for people whose accounts are to not be audited. For firms whose accounts should be audited, the ITR submitting deadline has been prolonged to February 15, 2022, from the sooner prolonged deadline of November 30 and the unique deadline of October 31, 2021.

Until twenty eighth December, 4.86 crore ITRs have been filed. The entire variety of ITRs filed for the evaluation yr 2020-21 (FY 2019-20) stood at 7.38 crore. It stood at 6.78 crore for FY 2018-19 and 6.74 crore for FY 2017-18. There was a constant enhance within the variety of ITRs filed through the years.

Clearly, a considerable variety of folks haven’t but filed their earnings tax returns. The variety of ITRs filed until December 28 is 2.52 crore lower than the entire quantity registered within the earlier yr. If we go by the common per day ITR submitting development, round 2 crore persons are more likely to miss the December 31 deadline.

What’s going to occur if you happen to miss the December 31 deadline? You possibly can nonetheless file your return, however it would have monetary implications.

Earlier than delving into the monetary implications, it is very important observe the distinction between ‘due date’ and ‘final date’ for ITR submitting. The due date is the date by which ITR will be filed with out paying any late charges. The ITR will be filed till the final date with paying relevant late charges. The final date for ITR submitting for the evaluation yr 2021-22 has been prolonged to March 31, 2022, from the unique deadline of December 31, 2021.

Evaluation yr (AY) refers back to the yr following the monetary yr (FY) during which earnings earned by you is assessed. As an example, FY 2020-21 the evaluation yr is 20221-22.

In case you fail to file the ITR by the due date of December 31 you possibly can nonetheless file the return known as ‘Belated Return’. The belated return will be filed as per part 139 (4) of the Earnings Tax Act, 1961. Nevertheless, the assessee can be liable to pay late submitting charges and penal curiosity, and likewise forego curiosity advantages on extra taxes paid.

The late payment penalty for submitting the ITR after the due date is upto Rs.5,000. Small taxpayers whose complete taxable earnings throughout the monetary yr underneath assessment doesn’t exceed Rs.5 lakh should pay a most penalty of Rs.1,000 if the ITR is filed after the due date however earlier than the final date of March 31, 2022.

Please observe that in case your earnings is beneath the taxable restrict you then will not be required to pay any penalty. Nevertheless, there’s a catch! If a resident particular person has earnings from overseas property the late submitting charges will likely be levied even when the gross earnings doesn’t exceed the tax exemption restrict. The essential tax exemption restrict is Rs.2.5 lakh regardless of the taxpayer’s age.

Till the monetary yr 2016-17, there was no penalty for submitting belated tax returns. In 2017, provisions have been added within the Earnings Tax Act for levying penalties on belated return submitting. The penalty was launched from the monetary yr 2017-18. The utmost penalty was set as Rs.10,000. Efficient from FY 2020-21 the penalty has been minimize to half. Now the utmost penalty stands at Rs.5,000.

Nevertheless, it isn’t simply the late payment penalty that ought to hassle you. There are different monetary implications additionally of not submitting the return inside the due date.

In case you fail to file the ITR inside the due date, you’ll be required to pay penal curiosity on the unpaid tax legal responsibility if there may be any.

Furthermore, you won’t be able to hold ahead losses even when you’ve got paid all of the taxes in time. If there may be any loss from enterprise and occupation together with hypothesis enterprise, short-term or long-term capital losses, or some other losses apart from loss from home property upto Rs.2 lakh, can’t be carried ahead.

In case you are eligible to hold ahead losses, you will need to file the return earlier than the due date. Taxpayers are allowed to hold ahead short-term and long-term capital losses to a most of eight evaluation years instantly following the evaluation yr during which the loss was first computed.

Additionally, you can not set off losses in opposition to the present yr’s earnings if you happen to fail to file the return earlier than the due date.

One other necessary issue to notice is that if you happen to fail to file the return earlier than the due date you’ll not obtain curiosity on refund for the surplus taxes paid for the interval of delay.

There are speculations that the federal government might lengthen the due date additional contemplating the COVID-19 scenario. Nevertheless, there are additionally possibilities that the date might not be prolonged. So, when you’ve got nonetheless not filed your ITR, do it now.

(Solely the headline and film of this report might have been reworked by the Enterprise Normal workers; the remainder of the content material is auto-generated from a syndicated feed.)