What to do if you have missed the ITR filing deadline If you are one of them, heres what you should do now
According to the Finance Ministry, only 5.83 crore individual assessees had filed their tax return till 31 July for the assessment year 2022-23. This is a good 1.31 crore (or 18%) less than the 7.14 crore tax returns filed for the previous assessment year. If you are among those who haven’t filed their tax return till now, our advice is to leave everything else and file it right now. For almost three months before the 31 July deadline, government agencies had been exhorting taxpayers to file their returns. Taxpayers were sent numerous reminders through SMSs and emails but not many paid heed. In fact, almost 3.35 crore (or 57% of the total) returns were filed in the last 10 days of July. Of these, more than 72 lakh were filed on the very last day, which is a record in itself.Filing tax returns has become easier and less complicated in recent years. By and large, all the financial information of the individual gets aggregated into the Annual Information Statement (AIS). Using the pre-filled option, you can file the return yourself or take help from a tax filing portal. If all your documents are in place, the whole process will not take more than 30-40 minutes. So, why did more than 72 lakh Indians wait till the last date to file their returns? And why did 1.31 crore assessees miss the deadline?
One reason could be that many taxpayers were expecting that the last date for filing income tax returns will be extended. The deadline has been extended for the past couple of years due to Covid. In fact, last year, the deadline was extended twice and many people were expecting a repeat this year. However, despite numerous representations by professionals and organisations, the government did not buckle under pressure.
Penalty for late filing
If you missed the 31 July deadline, you can file your tax return now. Some taxpayers will have to pay a small penalty, but it could get worse if they delay it further. The good news is that if the individual’s gross income is below Rs.2.5 lakh, there is no penalty for late filing (see table). But mind you, this is the gross income before deductions and exemptions.
So if your income was Rs.7.2 lakh, but deductions reduced it to Rs.4.8 lakh, you will have to shell out Rs.5,000 penalty for non-filing. The penalty is not the only loss that later filers will face. They also can’t carry forward capital losses of the current assessment year. Taxpayers who filed by 31 July can carry forward their capital losses to subsequent years for up to eight financial years. But if you miss the tax filing deadline, you forego this tax benefit.
The government has also shortened the period for e-verification of returns filed after the 31 July deadline. A circular issued this week says that returns filed on 1 Aug and after will have to be e-verified by the assessee within 30 days of filing. If not e-verified within 30 days, the return will be deemed invalid. The last date of filing a belated return is 31 December. If you also miss that deadline, you will not be able to file your return except in response to a notice from the tax department.
Do you need to file your tax return?
Many people may have missed the 31 July deadline thinking they don’t need to file their tax return. This is a common fallacy. Anybody with a gross income (before deductions and exemptions) of more than Rs.2.5 lakh has to file his tax return. Only senior citizens above 75 are exempt from filing returns if they fulfill certain conditions.
Even if your gross annual income is below Rs.2.5 lakh, you are required to file returns if you:
clocked total sales, turnover, or gross receipts, in business of over Rs.60 lakh. had total gross receipts from profession of over Rs.10 lakh. have income from capital gains have TDS or TCS of Rs.25,000 (Rs.50,000 for senior citizens) or more. spent more than Rs.2 lakh on foreign travel paid more than Rs.1 lakh in electricity bills have foreign income and assets deposited more than Rs.50 lakh in savings bank accounts deposited more than Rs.1 crore in current accounts Filing tax return is advisable even if you do not have taxable income. Just like your credit history, your tax history can help you get loans in future. Besides, many countries check income details of visa applicants and the ITR can be a very useful document in this regard.
( Originally published on Aug 08, 2022 )(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
This story originally appeared on: India Times - Author:Tax Cognition
