Missing ITR Verification Deadline Can Cost You ₹5000/- Penalty

The Central Board of Direct Taxes, via a notification, reduced the time limit for ITR verification from 120 days earlier to 30 days. The new law is effective from August 1, 2022, and will be applicable to all the ITRs filed on or after August 1, 2022. However, missing the 30-day ITR-filing deadline can cost you Rs 5000. Here’s why.

You are likely to have to pay upto ₹5000 penalty if you miss the deadline for verifying your income tax return unless you are filing belated ITR and have to pay the penalty in any case.

The income tax department has reduced the time limit for verifying ITR from 120 days from date of filing ITR previously to 30 days.

In a notification issued on July 29, 2022, the Central Board of Direct Taxes (CBDT) stated that this new rule regarding ITR verification will be effective from August 1, 2022. The CBDT notification also stated that the reduced time limit of 30 days is applicable to ITRs filed on or after August 1, 2022.

do not miss the itr deadline

For individuals who have filed ITRs on or before July 31, 2022, the time limit to verify continues to be 120 days.The latest notification by CBDT also states that if an individual verifies the ITR after 30 days (i.e., the new time limit), then in such cases the date of e-verification/ITR-V submission shall be treated as date of furnishing the return of income. Further, all the consequences of late filing of return under the Income-tax Act, 1961 will apply including the penal consequences as well.

A penalty of Rs. 5,000 is levied if the return is filed after the due date but before 31st December 2022,” says Deepak Jain, Chief Executive, TaxManager.in a tax e-Filing and Compliance Management Portal.

Taxpayers failing to file ITR for 2022-23 by July 31, 2022, may still file the returns by December 31, 2022, but will have to pay a fine along with interest on any unpaid taxes for the year 2021-22. “In case of failure to file ITR by the due date, you can file the belated return by 31st December 2022.

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The New ITR-U: 10 Things to Know Before Filing Your Income Tax Return

The New ITR-U: 10 Things to Know Before Filing Your Income Tax Return

Updated ITR Filing 2022: The IRS recently released a new form for the filing of Updated Income Tax Returns.

Updated ITR Submitting 2022:
The Internal Revenue Service recently released a new form for filing Updated Income Tax Returns. Budget 2022 featured a new idea of updated returns. It gives taxpayers two years from the end of the relevant assessment year to alter their ITRs. The new feature is meant to assist taxpayers who frequently make mistakes or omissions while filing ITRs.

The following are ten things you should know about the ITR filing update:

1. On the Updated ITR form, taxpayers must state the reason for filing as well as the amount of income that will be taxed in the updated return.

2. Taxpayers are not obligated to break down the income reported on their ITR (Updated).

3. Taxpayers can now file their amended income tax returns for fiscal years 2019-20 and 2020-21 using the new form ITR-U.

4. A digital signature or an electronic verification code is required for some taxpayers to file the Updated ITR electronically. The taxpayer must file the applicable assessment year’s ITR Forms and submit them with the new ITR-U.

5. Within two years of the end of the relevant assessment year, the ITR-U must be filed. Taxpayers must also explain reasons for revising their ITR in order to do so. There are a variety of reasons for submitting ITR-U, including a previous return that was not filed, income that was not declared correctly, incorrect income heads chosen, and the reduction of a carried forward loss, among others.

6. If an updated ITR is filed within a year (12 months) of the end of the relevant assessment year, a taxpayer must pay an extra 25% tax and interest owed.

7. If an amended ITR is filed after a year (12 months) but before 24 months from the end of the relevant assessment year, the taxpayer must pay an additional 50% tax and interest due.

8. If the person fails to pay the additional taxes, the return will be declared void.

Also Read: DELAY IN TAX AUDIT DUE TO ONGOING ASSESSMENT IN SOME OTHER ACT. PENALTY U/S 271B TO BE DELETED


9. If the entire tax owed is to be lowered and losses are to be offset against income, for refund, or for an increase in refund amount, you cannot file ITR-U.

10. For each Financial Year, a taxpayer can only file an Updated ITR once. As a result, it should be done with caution.

Special provision for the full value of consideration in certain cases.

Special provision for the full value of consideration in certain cases.

S-50C of IT Act, 1961

Consideration received from the transfer of a capital asset, being land or building or both

At a Value less than SDV – STAMP DUTY VALUE(for the purpose of payment of stamp duty in respect of such transfer)

The STAMP DUTY VALUE (SDV) shall be deemed to be the FVC (full value of the consideration) received or accruing as a result of such transfer.

What date shall be adopted for Computing Full Value Consideration (FVC)?

Where the date of the agreement for fixing the amount of consideration
And
the date of registration for the transfer of the capital asset is not the same,

the value adopted by the stamp valuation authority on the date of agreement may be taken.

Provided that the amount of consideration, or a part thereof, has been received by way of:

  • 1. A/c payee cheque or
  • 2. A/c payee bank draft or
  • 3. Electronic clearing system through a bank account or
  • 4. Through such other electronic mode as may be prescribed,

on or before the date of the agreement for transfer.

Related Article…

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Relaxation:-

Where SDV <= 110% of Consideration (as a result of the transfer),

Actual Consideration so received shall be deemed to be the FVC

What Happens If the Seller Does Not Accept the Value Adopted by SVA?

There is a possibility that the value adopted by Stamp Valuation Authority (SVA) may not be depicting the FMV at all times or the seller himself may not be satisfied with the value adopted by Stamp Valuation Authority (SVA) based on factors known to him.

Though stamp duty is generally borne by the purchaser, the purchaser may not be very concerned with the value adopted by SVA as it will be its cost of purchase.

S-194-O Payment of certain sums by the e-commerce operator to participant 

However, it makes a huge difference to the seller as it impacts his income tax which can be substantial based on the value.

 

As it is a matter of income tax for the seller, he is allowed to question the value adopted by SVA and claim the value is more than FMV under Section 50C before the income-tax authority unless such value is already questioned before any other authority or court.

In such cases, the income tax officer is required to make a reference to the valuation officer and market value will be determined by such a valuation officer.

The valuation officer, while determining market value, has to call for records/ documents from the taxpayer if required and give the taxpayer an opportunity of being heard and passing an order in writing, stating his valuation. Any value determined by the valuation officer can also be questioned before higher authorities.