#FinancialBytes: What happens if you fail to file your ITR?
What's the story
The Finance Ministry has extended the ITR filing deadline from July 31 to August 31, 2018. However, that doesn't mean you should leave ITR filing for the last moment. You should file it well in advance, as there could be dire consequences if you fail to meet the deadline. Here are 5 things that can happen if you fail to file your ITR.
Late fee
Penalties will be levied if you file ITR after deadline
A three-tier penalty system is followed, under which, if one files their return after the original deadline but before December 31, a Rs. 5,000 penalty is imposed. If the filing is delayed even further, a penalty of as much as Rs. 10,000 can be charged. However, for taxpayers whose annual incomes are not more than Rs. 5 lakh, the penalty is restricted to Rs. 1,000.
Interest
Late filing of ITR will result in interest being charged
If you do not file your ITR within the mentioned deadline, you'll have to pay interest on the net tax payable by you, at the rate of 1% per month, upto the date of actual filing of ITR. Notably, this interest amount is payable on tax payable after deducting the TDS, TCS, advance tax and other relief/tax credits given under the law.
Revising
Late filing will leave you with lesser time to revise
According to new I-T Department rules, a one-year period is given for revising your tax returns for any errors made in the filing. Earlier, this period was two years long. This implies that the more you delay your ITR filing, the lesser time you'll have for revising your return and rectifying any errors that you might have made.
C/f Losses
You'll not be able to carry forward losses
According to the I-T department's rules, if you fail to file your ITR, you'll not be allowed to recompense or carry forward this year's losses to future years under the heads "profits and gains of business or profession" or "capital gains". However, accumulated depreciation and losses under the head "income from house property" can still be carried forward.
Process delay
Late ITR filing will lead to delays in refund processing
Once you're done with the filing and verification of your ITR, the Central Processing Centre, Bangalore, of the I-T Department starts processing the return. On this basis, refunds due and tax liabilities of applicants are determined. So, in case an individual is awaiting a tax refund, late filing of ITR will result in them having to wait even longer for the refund.