The last day to file your income tax returns (ITR) for the financial year 2017-18 (assessment year 2018-19) is July 31, 2018. The new income tax rules state that one is liable to pay a Rs 10,000 penalty if one fails to file returns within the deadline. All ITR forms are now available on the income tax department's website.
If you file the ITR after 31 July but on or before 31 December, the penalty to be paid would be Rs 5,000. After 31 December calls for a penalty of Rs 10,000.
For taxpayers whose income does not exceed Rs 5 lakh per annum, a delay in ITR filing would attract a penalty of Rs 1,000.
In addition to the penalty, you are also liable to pay a penal interest of 1 percent per month for a delay on the tax amount that you were due to pay. Suppose you delay your tax payment of Rs 10,000 by 3 months and your income is above Rs 5 lakh, you will have to pay Rs 100 (1% of Rs 10,000) x 3 = 300 + 10,000 (penalty) = Rs 10,300 apart from taxes. This means you will have to pay Rs 20,300 to the IT Department.
Apart from penalties, your non-compliance will be reflected on your credit report. Suppose you are planning to take a home loan in the near future, the bank authorities will ask you for your tax return details.
The ITR form gives the institutions an idea of your income flow and your habit of complying with deadlines.
Note that income tax return filing is mandatory, for:
- Individuals below 60 years of age with income exceeding Rs 2.5 lakh
- Individuals above 60 years of age but below 80 with income exceeding Rs 2.5 lakh
- Individuals above 80 years of age with income exceeding Rs 5 lakh
Even if you do not have taxable income, it is advisable to file your zero-returns. You can use this when you apply for a visa or a loan in the future.