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ITR Filling – What makes you under Penalty?

All the Indian citizens whose net income is above the basic exemption limit have to mandatorily file their Income Tax Returns.

ITR is a type of form in which the Indian Taxpayers declare the details of their incomes, exemptions, deductions, and tax payable on their net income. ITR could be the main concern of various people. The due date for filing ITR had been extended to August 31st, 2019 and the person who will file ITR after that would be liable to penalties. However, people who are not under the tax payable income bracket have time to file it after the due date.

Well! This was just a small amount of information. This article would provide you details regarding the ITR filing and penalties regarding late ITR filing.

What is ITR filling?

ITR filing is a mandatory compliance for all the Indian citizens whose net incomes are above the basic exemption limit. Keeping this in mind, the income tax department has notified 7 different income tax forms to file ITR. These forms are

  • ITR 1
  • ITR 2
  • ITR 3
  • ITR 4
  • ITR 5
  • ITR 6
  • ITR 7

Every Indian taxpayer has to file his ITR on time or else has to face penalties as decided by the Income Tax Department. Applicability of these ITR forms depends upon various factors such as the income source of the individual taxpayer, the net income earned by him and whether he belongs to a Hindu undivided family, company or individual, etc.

Who has to file ITR?

A person has to mandatory file an ITR if he fulfills any of the condition given as follows:

  1. If the net annual income crosses the below-given limits
Individual Net Income
The individual below 60 years of age Rs. 2.5 lakhs/ annum
Individuals between 60yrs – 80yrs Rs. 3.0 lakhs/annum
Individuals above 80 yrs of age Rs 5.0 lakhs/ annum

2.   If an individual has two or more particular sources of income such as capital gains, house property, etc.

3.   If an individual wants to claim a refund from the income tax department.

4.   If individual wishes to apply for a loan or visa

5.   If an individual has invested or earned from the foreign assets in the concerned Financial Year

6.  In case the taxpayer belongs to a company or firm.

What are the Penalties for late Income Tax Return Filing?

As per the income tax department, a person is liable to pay penalties if he files his Income Tax Returns after the due date of 31st August 2019. This law of levying penalties to the individual was introduced with the budget of the year 2017 under section 234F and became effective for the AY 2018-2019. The penalties are givens as follows:

Penalty Applicability
Late fees Rs 5000/- An individual who pays his income tax return after the due date of 31st August 2019 but before 31st December 2019. (relevant assessment year)
Late fees Rs 10,000 An individual who files his ITR after 31st December 2019 but on or before the date 31st March
Late fees Rs 1000 It is only applicable for the small taxpayer individuals whose net income is below Rs 5 lakhs per annum.

People who are safe from penalties:

As per the chartered accountants, an individual whose net income is below the limit but still pays belated tax would not be liable to pay penalties.

So, here is the basic tax exemption limit for the different age groups:

Tax Exemption limit Age groups
Rs 2.5 lakhs/- Individuals below the age of 60 yrs.
Rs 3 lakhs/- For the individual senior citizen aged between 60-80 yrs
Rs. 5 lakhs/- For the individual super senior citizens above 80 years of age.

How to file your ITR returns?

Income tax returns could file in 5 easy steps. Be particular about the documents and form you are filling.

  • Collect documents
  • Download Form 26AS
  • Compute total income and tax liability
  • File ITR
  • ITR verification

Step 1: Collect all the required documents:

The first step you need to follow is to collect all the essential documents that would be required to file income tax returns. Here is the list of documents you would require for online ITR filing:

  • PAN card
  • Proposed bank account details
  • Aadhar Card
  • Investment Details
  • Interest certificate
  • Salary slips
  • Capital Gin statements, etc.

All these documents would be helpful to calculate your net income and TDS deducted in the FY 2018-2019. Form 16 is given by the employer if a TDS amount is deducted from the salary of employees whereas Form 16A is granted by the bank for the TDS deduction of fixed deposits.

Step 2: Download form 26AS

Once you have collected all the documents let’s start the procedure by downloading Form 26AS. Form 26AS is regarded as the tax passbook that contains all the information regarding the every month TDS deduction from your income in FY 2018-2019. Cross-check the TDS certificated with forms to verify whether your TDS was deposited with the government or not.

Form 26AS is downloaded from the TRACES website. Here are the steps to download it:

Visit the E-filling website> log in by filling account details> select MY ACCOUNT option> Click on VIEW FORM 26AS. After that, you would be redirected to the website where you can view and download the Form 26AS.

Step 3: Compute total income and tax liability:

It is important to calculate your total income to evaluate tax liabilities on it. You can calculate it by adding all the income you earned from five different heads and claiming all the deductions and setting off losses (if any) as suggested by the Income Tax Act, 1961. Once you have calculated your total income now you can easily evaluate the tax liability through the income tax slabs of the previous year provided by the income tax department.

Step 4: File your Income Tax Returns using an appropriate ITR form:

In case an individual wants to claim tax returns he/she can only do it by filing his ITR. So, whether you fall under tax payable bracket or not you still have to file ITR. The second most important thing is to file a relevant ITR form or else it would be irrelevant and termed as “Defective Return” and the applicant has to file it again.

Income Tax Department of India notifies the ITR form for each assessment year. Assessment year is regarded as the year following the financial year like assessment year for the FY 2018-2019 is 2019-2020.

You can easily file your ITR by downloading JAVA or EXCEL Utility whereas the individuals applying to file ITR 1 and ITR 4 can do it online without downloading any software.

Step 5: ITR Verification:

The last but one of the most important steps is ITR verification. There are 6 ways in which you can accomplish this step out of which 5 are digital and 1 is the physical method. ITR verification is mandatory to be done within 120 days of ITR filling or else it is regarded as deemed ITR which simply means you haven’t file any ITR.

In case you have forgotten to file your ITR do it quick or else you would be liable to pay late fees penalty.

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