It is importance of filing your Income Tax Return (ITR) for the financial year 2022-23 before the deadline of 31st July 2023. Neglecting this obligation can result in the imposition of significant penalties and various adverse consequences.
An individual must file the tax return by the due date, for example, 31st July, 2023, for Financial Year 2022-23.
An option to file a belated return is available till 31st December, 2023.
Failure to file the tax return by the due date, 31st July, 2023, will have financial implications.
Penalty
Late filing attracts a penalty of Rs 5000 for individuals with total income exceeding Rs 5 lakh.
For individuals having a total income upto this limit, the penalty is Rs 1000.
The most immediate penalty for late filing is a late filing fee of Rs 5,000, depending on the length of the delay.
If, failing to complete your ITR on time may result in the loss of some tax deductions and exemptions.
This could ultimately lead to higher tax liability.
So, if you file ITR after 31st December, 2023, you will have to pay a penalty of Rs 10,000.
Interest for Late Filing
If taxes are due, failure to file the return by the due date will attract additional interest of 1% per month until the return is file.
Interest shall be levied at 1% p.m. till the date of filing of the returns.
Beyond 31st December, the assessee would have the option to file update returns only in the case if there is a tax payable, but an additional tax of 25% is to be paid for update returns file till 31st March of 2024 and 50% of additional tax thereafter till 31st of December 2024.
Prosecution
Penalties up to 50% could be levied for underreporting of income and upto 200% for misreporting of income.
Non-filing of tax return despite the reminders may result in authorities initiating prosecution procedures with imprisonment ranging from three months to 7 years based on the tax outstanding.
New Regime benefit will not Apply
Salaried employees cannot opt for the new tax regime, and if they opt for this with the employer, late filing will result in additional tax and interest.
Losses cannot be Carried Forward
Certain losses are available for carry forward to future years.
This option is not available if returns are not file on time.
Only house property loss can be carried forward for future years.
Delay in Refund
Another potential downside of late filing is the possibility of delay tax refunds, if applicable.
Such delays can cause unnecessary financial strain and inconvenience.
Also, late filers may attract attention from the tax authorities, increasing the likelihood of audits and inquiries into their tax affairs.
To avoid these unfavourable outcomes, it is crucial to promptly file your ITR and ensure compliance with all tax regulations before the deadline.
If your tax situation is complex or uncertain, seeking professional advice is highly recommend.
Tax experts can assist you in navigating through the process smoothly, ensuring you meet all legal requirements and maximize eligible tax benefits.
As a responsible taxpayer, you must take the appropriate precautions to avoid these penalties and repercussions.
If you anticipate having difficulty making the deadline, do not be afraid to seek professional assistance.
Remember that completing your ITR on or before 31st July 2023 for FY 2022-23 is a financial duty that protects your interests and assures compliance with tax legislation.
Filing on time can avoid penalties, retain valuable deductions, and maintain good financial standing.
Make it a priority to fulfil your tax obligations promptly and seek professional guidance whenever need for a seamless and trouble-free tax filing experience.
If you have any outstanding tax liability, you will be charge punitive interest on the amount, as applicable in your circumstances, if you file a late return.
