In the last few years, the Income Tax Department has increased its strictness against taxpayers who do not file income tax returns. The department first sends notice to such people. Criminal cases are initiated against such taxpayers if the reply is not found satisfactory.
Filing of Income Tax Return (ITR ) is mandatory. The last date for ITR filing is fast approaching. That’s why you should start preparing to collect the necessary documents. This will make it easier for you to file income tax returns within the stipulated time. The time for ITR filing has been reduced considerably over the years. Hence, it is important to file returns on time to avoid late fees and penalties. The Income Tax Department can initiate criminal proceedings against you for non-filing of Income Tax Returns.
Last date for filing income tax return
As per section 139(1) of the Income Tax Act, the last date for filing income tax return for FY23 is July 31 for individuals who are not required to be audited. For taxpayers and companies for whom audit is required under section 44AB, the last date for filing income tax return is October 31, 2023. If you are unable to file the return within both these dates, then you can file the return till December 31, 2023. But, you will not be able to claim carry forward of any kind of losses in income tax return. This also includes loss on investment in shares.
If you do not file income tax return even till December 31, 2023, then you can file an updated return by paying additional tax. The rule for this is that if you file the return within one year from the end of the relevant assessment year, then you will have to pay an additional 25 per cent tax. If you file the return within two years from the end of the assessment year, you will have to pay an additional 50 per cent tax.
Criminal case for not filing income tax return
Under Section 276CC of the Income Tax Act, if a taxpayer willfully fails to file income tax return, the Income Tax Department can initiate criminal proceedings against him. In such a case, if the tax evasion is more than Rs 25 lakh, he can be punished with imprisonment ranging from 6 months to 7 years along with fine. In other cases, he can be punished with imprisonment of 3 months to 2 years along with fine. If the amount of tax owed to the taxpayer is less than Rs 10,000, then legal action cannot be initiated against him.
If any action is initiated against the taxpayer for non-filing of return, he can apply for compounding and instead of serving jail sentence, he can pay additional fine. For this, he has to make an application to the Income Tax Authority under section 279(2) of the Income Tax Act.
In the last few years, the Income Tax Department has increased its strictness against taxpayers who have not filed returns or paid taxes. With the last date for filing income tax return approaching, all taxpayers should start gathering their documents and file the return within the stipulated time. If they do not do this, they can get a notice from the Income Tax Department later.
(Abhishek Aneja is a CA. He is an expert in matters related to income tax and personal finance)
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