The last day of filing income tax returns is 31 December 2020. The Central Board of Direct Taxes (CBDT) has extended the date twice, but it is important to file your income tax returns before the deadline. If you miss the deadline, you can still file it, but you will have to face consequences in the form of fines or loss of tax benefits. You may also remember that if your salary falls below net income, you will not be asked to pay any penalty for filing a late or belated return.
As per the income tax regulations, the minimum exemption limit for persons below the age of 60 is Rs 2.5 lakh. For individuals or senior citizens 60 years of age or above but under 80 years of age, the tax exemption cap is Rs. 3 lakh. For people above 80 years of age and above the basic exemption limit is Rs 5 lakh.
If a taxpayer files a delayed ITR, i.e. after the due date, the returns filed are considered belated returns.
Penalties which you need to pay in case of late filing of returns.
- A penalty of Rs.5,000 shall be imposed on taxpayers if they skip the filing date for the relevant assessment year and file their returns on or before 31 December 2020. This year as a result of the Covid-19 outbreak, the government has extended the deadline to 31 December 2020 so that this penalty does not apply to FY2019-20.
- A penalty of Rs. 10,000 will be imposed if you file your income tax returns after 31 December 2020 and before the end of the relevant assessment year, which is 31 March 2021.
- The penalty is Rs. 1000 for small taxpayers with taxable income less than Rs. 5 lakh for late filings.
- In addition to penalties, late filing of income tax returns would attract 1 percent of interest on any tax paid due in the financial year according to Section 234A of the Income Tax Act of 1961. The interest estimate would start from the day deadlines ends, meaning the later you file the returns, the more interest you pay.
Benefits You May Lose for late filings of returns
- A belated I-T return will mean that you would not be able to carry forward capital losses in the next financial year. This basically means that you will not be able to minimize your tax burden for the next financial year, and you will not be able to cover your tax liability against income.
- If you are entitled to a refund, you will not be allowed to seek the refund if you file your return after the due date. You should also note that if you file an ITR within the due date, the interest on the refund will be determined from 1 April of the relevant assessment year to the date of the refund. You will miss out on this interest if you file a late return.
You should file your tax returns on time, as delays can lead to a review by the Income Tax Department.