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Consequences of not filing #incometax return at all

If you do not file your original income tax return by 31st of July (Non-audit taxpayers) & 31st October (Audited taxpayers), you can still file a belated ITR by 31st December.

If you do not file by 31st December also, you have these consequences mentioned ahead👇

1. UPDATED RETURN

If you do not file by 31st Dec, There's a remedy to file an updated return with:

✅25% penalty if you file within 12 months from the end of the relevant assessment year
✅50% penalty if you file within 24 months from the end of the relevant assessment year
Although, you can file an updated return only if it is favorable to the tax department which means if:

1. You have not filed or there's an error in filing the original/belated/revised return.
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2. The filing results in ADDITIONAL TAX LIABILITY
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3. The income is not decreased.


2. INQUIRY BEFORE ASSESSMENT

The department will formally send a notice asking you to file your return after the time limit has expired.

This can be initiated even after the date of the belated return has gone & not wait till the last date by when an updated return can be filed


3. BEST JUDGEMENT ASSESSMENT POST INQUIRY

The department may assess income on the basis of documents asked from you. On the basis of your documents, they will assess your income.

If you do not provide docs, they will assess your income to their best judgment and raise demand.

4. PENALTY FOR CONCEALMENT OF INCOME

Additionally, the department may impose a penalty of 50% of the tax payable on the income not disclosed by filing the income tax return which may also extend up to 100% to 300% in certain other cases.

5. LAUNCH A PROSECUTION

If tax evaded is:
✅Less than 25L, Imprisonment of 3 months which may extend to 2 years with fine.
✅More than 25L, Imprisonment of 6 months which may extend up to 7 years with fine.

The prosecution is not launched until the updated ITR can be filed.


Don't wait if you haven't filed yet for the financial year 2021-2022 (AY 2022-2023) which can be filed till 31st December 2022.

File now to not face any of these consequences above.

Filing ITR has many other benefits as well.

Share it with someone who is very casual when it comes to filing their taxes🙂



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