Income Tax Returns
The taxpayer must first ascertain which ITR form they must fill out before filing returns. There are a total of 7 ITR forms available, of which ITR 1 to 4 is applicable for Individuals and HUFs.
ITR-5 applies to Partnership Firm/ LLP, ITR-6 is applicable for Companies and ITR-7 is to be filed by Trusts.
Due Date for Filing Income Tax Returns
The deadline for filing Tax Returns for the Financial Year 2023-24 ( Assessment Year 2024-25 ) is July 31, 2024. In case you miss this deadline, you have the option to submit a belated return until December 31, 2024.
The return to be filed in the upcoming year pertains to the income earned during FY 2023-24, covering the period from 1 April 2023 to 31 March 2024. The assessment year, on the other hand, corresponds to the review period for FY 2023-24.
During this assessment year, taxpayers are required to file their returns and disclose all incomes, exemptions, deductions, losses, etc., that were incurred or received during the fiscal year for tax evaluation purposes. Specifically, for the income earned in FY 2023-24, the assessment year will be the subsequent year, spanning from 1st April 2024 to 31st March 2025, denoted as AY 2024-25.
Advantages of Filing Income Tax Returns
Claiming Income Tax Refunds: Filing your ITR allows you to claim any income tax refunds owed to you by the tax department. This ensures that you receive any excess taxes paid during the fiscal year.
Reporting Foreign Assets: If you have earned income from or invested in foreign assets during the financial year, filing your ITR is essential for accurate reporting and compliance with tax regulations.
Visa and Loan Applications: Many visa and loan applications require applicants to provide proof of income and tax compliance. Filing your ITR enhances your credibility and eligibility for such applications.
Compliance for Companies and Firms: Whether your company or firm has incurred a profit or a loss, filing ITR is mandatory. This ensures legal compliance and transparency in financial reporting.
Carry Forward of Losses: If you have experienced losses under the business/profession or capital gains categories, filing your ITR before the due date allows you to carry forward these losses to subsequent years. Failure to file on time may result in loss forfeiture.
Penalties for non-filing of Income Tax Returns
An income tax return is a vital document for taxpayers to declare their income, deductions, exemptions, and taxes paid. Failure to file ITRs on time incurs penalties under Section 234 F of the Income Tax Act, with late filing charges ranging from Rs 1,000 to Rs 5,000 depending on income levels.
Additionally, interest accrues under Section 234A on unpaid taxes for each month of delay. Updated Income Tax Returns ( ITR-U ) allow taxpayers to rectify errors or omissions within two years of the relevant assessment year.
The government’s authority to prosecute individuals failing to meet income tax filing deadlines, particularly when tax avoidance exceeds Rs 10,000. Such violations can lead to imprisonment ranging from three to seven years, reminding stakeholders the gravity of non-compliance.
A Recent Case
Recently, a woman in Delhi faced a six-month jail term for failing to file an income tax return on earnings amounting to Rs 2 crores. This ruling by Additional Chief Metropolitan Magistrate Mayank Mittal highlights the serious repercussions of non-compliance with income tax regulations.
Let’s delve into the details of this case and explore the penalties for not filing income tax returns.
Read More: Woman Gets 6-Months Imprisonment for Rs. 2 Cr ITR Non-Filing
The conviction of Savitri, as identified by the court, stemmed from a complaint filed by the Income Tax Office ( ITO ). The complaint alleged that despite a tax deduction at source ( TDS ) of Rs 2 lakh against a receipt of Rs 2 crore during the 2013-14 fiscal year, no income tax return was filed by the accused for the assessment year 2014–15.
This led to the imposition of a six-month jail term and a fine of Rs 5,000 on Savitri. Her lawyer’s plea for leniency based on social circumstances resulted in a 30-day bail period to contest the verdict.
Conclusion
The case of Savitri and the penal provisions serve as a stark reminder of the legal and financial ramifications of neglecting income tax obligations. Timely filing of income tax returns is crucial to avoid penalties, interest charges, and potential legal consequences, ensuring compliance with tax regulations and contributing to a transparent financial ecosystem.
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