Quick Read: What Happens If You Fail to File ITR on Time?

When your annual income crosses a certain amount, Some tax is charged upon the income. The income tax return is filed to pay the taxes. You should file ITR on time or else you will have to face penalty or even punishment depending upon the severity of the case. It is a moral duty of every earning citizen to file their income tax return on time, The process may be a bit complicated but it has many benefits.

Benefits of Filing ITR on Time :

• The income tax return has legal benefits. It acts as both, proof of your identity as well as your income. It contains a detailed list of your income and expenses which is needed while purchasing the property, especially for self-employed individuals.
• While applying for a loan, Banks usually ask for your income tax return for the last three years because it helps them in chucking your past financial situation and deciding whether you are eligible for the loan. This is also helpful in getting credit cards. 
• You can get tax deductions which are helpful in some investments and ultimately reduces the tax you have to pay.
• If you are looking forward to going abroad then an income tax return is very useful for you because it gives an idea about your financial eligibility to the embassy and makes it easier to approve your visa. 
• It protects you from any penalties or punishment that you can face if you do not file ITR on time. It also helps in carrying forward your losses of a particular year to the following year.

Missed the Deadline, Now What?

If you have missed the deadline then you can file the income tax return with some additional late fee and the ITR will be called a Belated ITR. The deadline for filing the belated ITR is December 21, 2022. If you fail to file the belated income tax return then you will have to wait for the notice from the income tax department. 

Late Fees for Late Filing :

The late fee for filing the belated ITR comes under Section 234F of the Income Tax act, 1961. For taxpayers with annual income below Rs.5lacs, The late fee is Rs.1000. For taxpayers with annual income above Rs.5lacs, The late fee is Rs.5000. If you are able to file ITR on time then you will also be able to avoid any late fees and get the benefits mentioned above.

If Late Filing is Not Done Too?

If you are unable to pay the belated income tax return then a notice will be sent by the income tax department regarding the issue and you should promptly respond and pay any extra penalty charged with the ITR. The inability of such payment may lead to legal action against you. You can also face imprisonment for seven years in the worst-case scenario.

There are many benefits to filing the income tax return on time. You should also not misinform about your income, It may lead to a penalty of almost 200% of the tax levied upon the actual income. The tax deducted at source should be paid in time to avail of the benefits and avoid any complications. As earning citizens, It is our duty to file our income tax returns on time. This is a major source of revenue for the government and these funds are needed for the development and welfare of the country. What Happens If You Fail to File ITR on Time