What happens if you don’t file your ITR by December 31, 2021?

What happens if you don’t file your ITR by December 31, 2021?

The deadline for filing the Income Tax Return (ITR) for the financial year 2020-2021, i.e. assessment year 2021-2022, for the general category of all taxpayers whose accounts are not required to be audited and which covers all salaried is usually 31st July each year, but it has now been extended until 31st December 2021. What happens if an individual taxpayer whose accounts aren’t subject to audit misses the deadline and fails to file his ITR for the assessment year 2021-2022 by December 31, 2021? Let’s talk about it.

Is the due date also the ITR’s last date of filing?

The common misconception is that the due date is also the deadline after which you cannot file your ITR, which is incorrect. There are two dates that are important for ITR filing: the due date and the last date. If you miss the deadline, you still have until the end of the year to file your ITR. For those taxpayers whose accounts are not required to be audited, the due date for filing ITR for each year is 31st July of the year after the year for which the ITR is to be filed, and the last date, as per the modified law, is 31st December of the following year. For the fiscal year 2020-21, the due dates and deadlines for filing ITRs for such taxpayers have been extended to December 31, 2021, and March 31, 2022, respectively.

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What if you don’t meet the deadline?

If you miss the extended due date of December 31, 2021, you can still submit your current ITR by March 31, 2022, but you will lose your right to carry over any losses from the current year that cannot be offset against current year’s revenue. So, if you have losses under the headings of business income, capital gains, or losses exceeding two lakhs rupees under the house property heading during the current year that you would otherwise be able to carry forward for set off in subsequent years, you won’t be able to do so if you miss the deadline of December 31, 2021.

If the taxes paid by you or on your behalf exceed your tax liability and you are entitled to a refund, you forfeit your claim to interest on the excess taxes paid for the period of delay that is attributable to you. If the taxes paid by you or on your behalf are less than your total tax liability, you will be required to pay interest for the time of delay in filing your ITR, even if you have already paid the deficit after March 31, 2021.

Late payment for filing your ITR after the deadline

In addition to the aforementioned repercussions, if you file your ITR beyond the due date and your taxable income exceeds five lakhs, you will be required to pay a flat late charge of five thousand rupees at the time of filing. If the taxable income is less than Rs. five lakhs, the late fee is limited to Rs. 1,000/-.

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So, if you’re compelled to file your ITR for any reason, even though you don’t owe any taxes, you’ll have to pay a one-thousand-rupee late fee. This can happen if your gross total income exceeds the basic exemption ceiling but does not exceed five lakhs, and no tax is required due to the refund provided under Section 87A. This can also happen if you need to file an ITR because you own assets outside of India, are a signatory to an account outside of India, or have spent more than the prescribed threshold limit on energy or overseas travel.

What happens if you miss the deadline for submitting your ITR?

If you fail to file your ITR by the extended due date, which is March 31, 2022, Income tax department can levy a minimum penalty of up to 50% of the tax that you could have avoided by not filing the ITR, in addition to your income tax and interest liability until the date you file your ITR in response to the tax department’s notices.

Only a few individuals are aware that if you do not file your ITR by the deadline, the government has the authority to prosecute you and imprison you. The current income tax laws stipulate a three-year minimum term and a seven-year maximum punishment. The government does not have the authority to prosecute you for every incident of failing to file an ITR. Only if the amount of tax sought to be avoided exceeds Rs. 10,000/- can the income department bring a case.

In the last seven years, companies have spent Rs 1.09 trillion on CSR operations, according to the MCA.

In the last seven years, companies have spent Rs 1.09 trillion on CSR operations, according to the MCA.

According to the corporate affairs ministry, corporations have spent Rs 1.09 lakh crore on various CSR activities, including those linked to health, education, and poverty eradication, under the companies law in the last seven financial years.

Under the Companies Act of 2013, profitable organizations must devote at least 2% of their three-year annual average net profit to corporate social responsibility (CSR) activities throughout each fiscal year.

Rao Inderjit Singh, Minister of State for Corporate Affairs, stated on Monday that corporations have responded favourably and shown hopeful signals in adopting a culture of social responsibility since the CSR provision was enacted in April 2014.

“This may be seen in the increase in corporate social responsibility spending from 2014-15 to 2020-21. Companies have spent over Rs 1.09 lakh crore on various operations during this time…, “In a written reply to the Lok Sabha, he stated.

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Health, education, poverty eradication, hunger, women empowerment, armed forces veterans’ welfare, environment, sports, rural development, slum development, and welfare of the weaker sections are among the initiatives.

According to disclosures filed by corporations in the MCA21 registry through September 30, 2021, companies spent a total of Rs 85,109.09 crore on CSR during the financial years 2016-17 to 2020-21, Singh added.

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During the same time period, the top 100 corporations spent Rs 46,654.52 crore of the total amount.

Singh said the goal behind the CSR architecture is to engage corporations as partners in the country’s socioeconomic development by utilising their managerial efficiency, best practises, technology, and innovation in the delivery of public goods and services.

RBI’s Dec 31 deadline on tokenization: What does it mean for you?

RBI’s Dec 31 deadline on tokenization: What does it mean for you?

  • With tokenization, the entities involved in the transaction do not have to memorize what the card entails on either end since it is converted into a unique ‘token’ that facilitates the payment
  • Tokens and tokenization are terms that have been used often, recently. The Reserve Bank of India brought in CoF (card on file) tokenization guidelines that mandate replacing actual card data with encrypted digital tokens to facilitate and authenticate transactions.
  • Therefore, starting from January 1, 2022, the use of one’s credit or debit cards while shopping on any online platform such as Flipkart, Amazon, Myntra, Nayka etc., will change. One will not have to save one’s 16-digit card number along with the card’s expiry date on the website. As per RBI’s new rules, the only way one will be conveniently making a card payment repeatedly is through the process called ‘tokenization.’

What is CoF Tokenization?

Tokenization is a process that replaces sensitive information with a unique set of characters.

Shailesh Paul – Head, Merchant Sales, Acquiring and Cyber Source, India and South Asia at Visa says, “When applied to payments, tokenization essentially means that the 16-digital card number is replaced by a unique code or ‘token’ – useful for mobile or online transactions. This devaluation of sensitive data that tokenization facilitates, helps to mitigate any risks of security breaches.”

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In March 2020, the RBI said that payment aggregators and their on boarded merchants must not save the card details of users. Therefore, the RBI has allowed card issuers to offer card tokenization services as Token Service Providers (TSPs). This will be facilitated through consumer consent and will require an ‘Additional Factor of Authentication (AFA)’. With tokenization, the entities involved in the transaction do not have to memorize what the card entails on either end since it is converted into a unique ‘token’ that facilitates the payment.

The deadline to align with this mandate is January 1st 2022. Till then, any previous data that has been stored also needs to be deleted.

How Tokenization will benefit consumers at large to adopt digital payments?

Industry experts say tokenization does not affect the payment process or customer experience directly but adds another layer of security to the transactions. It assures that an individual’s sensitive details remain with them while they transact, thereby nullifying all risks associated with the vulnerability of data.

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Impact of the deadline of December 31, 2021

Experts say merchants are a crucial part of the transaction chain. “As tokenization comes about, they will have to make an effort to deploy tokenization for their customers. This is a complex task, requiring consent and co-operation from different players who are at varying levels of readiness. There is no change in the processes of chargebacks, disputes and the like, during the migration phase or post-implementation,” says Paul.

Having said that, RBI has mandated tokenization for merchants, not customers. An individual will still be able to choose whether or not they want their cards to be tokenized. Should a customer choose to not tokenize their card, they will have to enter their full card details, CVV and other details every time they make an online or mobile transaction, which will make the process tedious and lengthy. It is so because RBI has also mandated that all card details that had been saved with merchants up until now, have to be deleted.