Filing of tax returns has become easier and less complicated in recent years. Overall, all of a person’s financial information is aggregated into an Annual Information Statement (AIS). You can file the return yourself or take someone’s help using the pre-filled option tax payment Door. If all your documents are present, the whole process will take no more than 30-40 minutes. So, why did over 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 would be extended. Due to covid, the deadline has been extended for the last few years. In fact, last year, the deadline was extended twice and many people were expecting a repeat this year. However, despite several representations by professionals and organisations, the government did not succumb to the pressure.
a punishment for filing late
If you missed the July 31 deadline, you can file your tax return now. Some taxpayers will have to pay a small penalty, but it could be worse if they delay further. The good news is that there is no penalty for late filing if the individual’s gross income is less than Rs 2.5 lakh (see table). But keep in mind, this is the earlier gross income deduction and discount.
So if your income was Rs 7.2 lakh, but the deduction reduced it to Rs 4.8 lakh, you would have to pay a penalty of Rs 5,000 for not filing. Penalty is not the only loss that will have to be faced by filers later. They also cannot carry forward the capital loss of the current assessment year. Taxpayers who file by July 31 can carry forward their capital loss to subsequent years for up to eight financial years. But if you miss the tax filing deadline, you forfeit this tax benefit.
The government has also reduced the period for e-verification of returns filed after the July 31 deadline. A circular issued this week states that returns filed on and after August 1 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 treated as invalid. The last date for filing delayed returns is December 31. 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 July 31 deadline thinking they are not required to file their tax returns. This is a common misconception. Anyone with a gross income (before deductions and exemptions) of more than Rs 2.5 lakh needs to file his tax return. Only senior citizens above 75 are exempted from filing returns subject to fulfillment of certain conditions.
Even if your gross annual income is less than Rs 2.5 lakh, you need to file a return if you:
- Viewed total sales, turnover, or gross receipts in a business of more than Rs.60 lakh.
- There were total gross receipts from the profession of more than Rs.10 lakh.
- is income from capital gains
- TDS or Rs 25,000 (Rs 50,000 for senior citizens) or more.
- Spent more than Rs 2 lakh on foreign travel
- Payment of more than one lakh rupees in electricity bills
- have foreign income and assets
- Deposits above Rs 50 lakh in savings bank accounts
- Deposits of more than Rs 1 crore in current accounts
It is advisable to file a tax return even if you do not have taxable income. Like your credit history, your tax history can help you get a loan in the future. Also, many countries check the income details of visa applicants and ITR can be a very useful document in this regard.