Paying income tax is not enough, you must file the ITR by July 31, 2024 to avoid jail in certain cases
It is important to file your income tax return (ITR) for FY 2023-24 (AY 2024-25) before the deadline of July 31, 2024, if you are not required to conduct income tax audit. In addition, you must settle any self-assessment tax when filing the ITR if you have any outstanding tax liability that has not been paid through advance tax. Neglecting to pay income tax and failing to file the ITR can lead to significant troubles, including potential imprisonment in certain circumstances. Read on to find out what will happen if you don't file your ITR before the due date and what are your options.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
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For salaried employees, TDS is usually deducted to settle the tax liability arising from the salary heads of income. However, for other incomes like capital gains, dividend, etc you need to pay off the income tax liability through the self-assessment tax option on the e-filing ITR portal's e-Pay tax tab. If you are liable to get refund against your salary income, you can adjust it against the tax liability under other heads of income."Paying tax through self-assessment is not an alternative to filing an ITR. While making timely tax payments can save you from accruing interest on the unpaid amount, it does not exempt you from the obligation to file your ITR. Failure to file your ITR can result in various consequences, such as penalties and potential prosecution. The income tax department may send you notices or intimations, and you could be considered a defaulter," says Lokesh Dhyani, Partner, Aekom Legal.
Last year, a woman in Delhi received a six-month jail sentence for failing to file her ITR, though she was required to do so.
"Under the Income Tax Act in India you can be jailed for not filing your ITR or for not paying your taxes if you're liable to do so. The law specifically mentions imprisonment for acts like failing to file a return, concealing income, or making false statements. If your tax liability is more than Rs 25,000, you could be punished with rigorous imprisonment for a minimum of six months and up to seven years, along with a fine. For tax liabilities less than Rs 25,000, the punishment includes rigorous imprisonment for a minimum of three months and up to two years, plus a fine. It's crucial to stay on top of your tax obligations and pay it to avoid these severe penalties," says Dhyani from Aekom Legal.
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Woman gets 6-month jail for not filing ITR; who has to mandatorily file income tax return, consequences of not filing
What is the penalty for missing ITR deadline of July 31, 2024
Priyanka Jain, associate partner, Vaish and Associates, a law firm, explains the penal consequences of not filing ITR before its deadline:Late filing fees: Once the deadline to file ITR by July 31, 2024, is over, all you can do is file a belated ITR before December 31, 2024, by paying a late filing fee. According to Section 234F late filing fees of Rs 5000 can be levied, however, if your income does not exceed Rs 5 lakh, the late filing fees is Rs 1,000. But if your total income is below the basic exemption limit then no late filing fees are applicable.Penal interest: Interest at the rate of 1% per month or part of the month will be charged on the outstanding tax amount from the due date under Section 234A of the Income Tax Act. Further failure to pay self-assessment tax or underpayment of the tax can result in penalties under Section 140A (3) of the Income Tax Act. However, do note that the penalty amount cannot exceed the amount of tax in arrears.Prison sentence: "The legal provisions under section 276CC in the Income Tax Act specified that you can be imprisoned for not filing ITR or not paying income tax when liable. This applies even if the tax was paid through advance tax or TDS, but the ITR was not filed," says Jain."The prosecution under Section 276C is a more severe consequence that can arise in cases of suspected tax evasion, rather than just the failure to file the ITR. The key penalty directly linked to non-filing of the ITR is the Section 234F penalty," says Jain.
Jain cites a legal case related to this matter.
"In the case of the DEPUTY COMMISSIONER OF INCOME TAX vs. M. SUNDARAM (2010) 322 ITR 196 (Mad) it has been opined by the Hon'ble Court that "the respondent-assessee accused has not filed his returns in time, for the respective assessment years. So, he is liable to be prosecuted for the offence under s. 276CC of the Act. Since he has not filed the returns in time, mere payment of interest/penalty will not absolve his criminal liability. Hence, the trial Court has committed error in acquitting the respondent-accused. The appellant-Income-tax Department has proved that the respondent-accused is guilty of the offence under s. 276CC of the Income-tax Act, beyond reasonable doubt. The respondent accused is guilty of the offence under s. 276CC of the Income-tax Act. Therefore, he is liable to be convicted for the offence under s. 276CC of the Income-tax Act," she says.
What are your options to save yourself if you missed the ITR filing deadline of July 31, 2024
If you are required to file a tax return but do not do so by July 31, 2024, there is no need to worry. You will have to pay a late filing fee and submit a belated ITR by December 31, 2024, for the financial year 2023-24 (assessment year 2024-25). Ensure that you do not miss this deadline.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
This story originally appeared on: India Times - Author:Faqs of Insurances