Today you need to file your income tax returns attentively and on time if you are a citizen of India with a source of income. The consequences of failing to file your taxes might be severe. Your income will be impacted if you do not file your tax returns. The majority of individuals are aware that if they make more than a certain amount in a given year, they must pay the proper tax. However, most people are perplexed about filing their income tax returns throughout tax season. These forms, also known as ITRs, are just as important as paying your tax bill when it comes to staying in compliance. Here is a glimpse at what happens if an income tax return is not filled in India.
What is an income tax return?
An income tax return is a form that tells the government how much money you make. As a result, all taxable persons are required to file an income tax return regularly. On multiple times, the Internal Revenue Service has reminded taxpayers of the need of filing ITRs on time. If you fail to notify the government, you may face penalties and troubles in the future due to not filing it, as it might be considered tax evasion. A penalty might be imposed on someone who forgets to file their ITRs. In addition, a delay or halt in completing income tax returns makes you liable to pay interest on the taxable amount owed to the government.
What Are the Benefits of Filing a Tax Return?
- Preparation to file ITR will make it easier to secure a loan from a bank or financial organization.
- This is required to be compliant and on the right side of the law.
- Individuals can claim tax refunds as needed.
- It can be used to prove your salary as well as your address.
- Allows for faster visa approval and processing
- Allows losses to be carried over
- Individuals and businesses can benefit from this service to avoid fines and interest on their tax debt.
What Happens If People Don’t File Their ITRs?
Here are some things that will happen if you do not file the income tax returns on time:
1. Update your income tax returns in less time:
If you make any fault when filing an ITR, you must follow a certain system to make the necessary corrections. Taxpayers before had a two-year window to look at and resubmit incorrect ITRs. However, as of the end of the financial year, the government has limited this window to one year. As an outcome, if sooner you are not filing your returns, the longer you will face certain consequences of not filing ITR and correcting any problems.
2. What is the penalty for filing a false tax return?
Fraudulently False income tax refund requests that lower taxable income by misreporting income or establishing false losses can result in severe penalties. A penalty is a three-tiered fee system imposed for failing to file income tax returns by the due date. Fees payable are 5,000 if a return is filed after the due day and 10,000 if it is filed after the due date. The costs payable would be limited to 1,000 for taxpayers with an annual income of less than 5,000,000.
As you can see, all people and businesses must ensure that their income tax returns are filed on time to avoid such complications. However, submitting your returns can be a difficult and time-consuming process because of the amount of documentation required. As a result, Sinewave is best in creating tax software in India to complete tax returns on schedule. If you are looking for the ITR preparation and efiling software, Sinewave’s TaxbasePro income tax software will help gather the necessary data and file your returns with different facilities.