Income Tax: Paying tax increases the country’s revenue, which is used for many development projects. At the same time, many types of actions can be taken if tax is not paid.
Income Tax: Paying tax to the government is the responsibility of every Indian. This not only increases the revenue of the country, but taxpayers also get many benefits. On the other hand, not paying tax can lead to interest, penalty as well as legal action. Let us know what are the consequences of not paying tax.
Let us tell you that there are two types of tax systems in India, old and new. Each one has a different tax slab and different rules. A person can choose them according to his income.
Tax slabs under old tax regime
- Up to Rs 2.5 lakh: Nil
- Rs 2.5 lakh to Rs 5 lakh: 5%
- Rs 5 lakh to Rs 10 lakh: 20%
- Above Rs 10 lakh: 30%
Under this, people with income up to Rs 5 lakh can claim a deduction of up to Rs 12,500 under Section 87A of the Income Tax (I-T) Act.
Tax slabs under the new tax system
- Up to Rs 3 lakh: zero
- Rs 3 lakh to Rs 7 lakh: 5%
- Rs 7 lakh to Rs 10 lakh: 10%
- Rs 10 lakh to Rs 12 lakh: 15%
- Rs 12 lakh to Rs 15 lakh: 20%
In this, the limit of standard deduction on personal income is Rs 75,000.
You will have to face these consequences for not depositing tax
Late filing- For filing income tax return late, a penalty has to be paid under Income Tax Section 234F. If your total income is more than 5 lakhs, then a penalty of up to Rs 5,000 will have to be paid, while for income up to 5 lakhs, a fine of up to Rs 1,000 will have to be paid.
Interest- Interest is charged under Section 234A of Income Tax on the amount not paid as tax. The Income Tax Department charges interest at the rate of 1 percent every month for delay in filing returns. Similarly, under Section 234B, interest is also charged on advance tax at the rate of 1 percent every month. Whereas under Section 234C, if someone does not pay the installments of advance tax on time, then interest is charged on it at the rate of 1 percent per month.
Notice from Income Tax- Under Section 156 of the Income Tax Department, the Income Tax Department demands tax, penalty or interest from the taxpayer. Ignoring these can lead to legal action.
Strict penalty- Under Section 270A, 276CC of Income Tax, there is a provision for strict punishment for tax evasion, whether done intentionally or unintentionally. Under Section 270A, a penalty equal to 50 to 200 percent of the tax payable is imposed for giving wrong information about income. At the same time, according to Section 276CC, deliberate tax evasion can lead to imprisonment from three months to seven years along with a penalty.
Under this, if the Income Tax Department wants, it can confiscate your property to recover the outstanding tax amount, deduct the amount of direct tax from the salary. Along with this, delay in paying tax or not paying it also affects your credit score. At the same time, in many serious cases, your passport can be canceled.
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