ITR Filing – What Make You Under Penalty

People whose income is above the basic exemption limit have to mandatorily file Income Tax Returns.

ITR is a form in which a taxpayer declares the details of his income, exemptions, deductions, and taxes payable on his income. Income Tax Return would be the main concern for you as the deadline is coming close. The date for filing income tax returns has been extended from July 31, 2019, to August 31, 2019. A person who would pay it after August 31, 2019, has to face a penalty of Rs 10,000. However, the individual who does not fall under tax payable income, they can file ITR ever after the due date without any penalty.

Well! This is just a small amount of information. Here is detail regarding the ITR filing and the penalties regarding late filing.

Penalty for late ITR filing:

A taxpayer has to pay late fees of:

  • Rs 5,000:  a taxpayer is liable to pay a penalty of Rs. 5000 if he files the tax return after the deadline i.e. August 31st, 2019 but on or before the date December 31st, 2019 (relevant assessment year).
  • Rs 10,000:  a taxpayer is liable to pay a penalty of Rs. 10,000 if he files a tax return after December 31, 2019, but on or before March 31st (between January 1st, 2020 and March 31st, 2029).
  • Rs1000: In case you are a small taxpayer whose annual income is below Rs 5 lakh then the maximum fees you have to pay is Rs 1,000.

The law of levying a penalty of late filing fees was introduced in the budget 2017 under section 234F and became effective for the FY2017-18 or AY2018-19.

People who are safe from penalties:

As per the chartered accountants, an individual whose annual income does not fall under the basic threshold limit files a belated return, will not be applicable to pay the penalty fees.

The basic tax exemption limit of different age group is listed as follows:

  • Rs 2.5 lakh for the resident individuals below the age of 60 years.
  • Rs 3 lakh for the senior citizens aged between 60 years- 80 years, income
  • Rs 5 lakh for the super senior citizens whose age is above 80 years

Abhishek Soni a CEO of stating that, as per the section 234F, there would be no late filing fees to be levied on the ITR filed after the deadline if the gross total income of a person does not exceed the basic exemption limit.

While Shalini Jain, Tax Partner at EY India clarified the statement by saying “Section 234F draws reference of people liable to pay late fees for filing a belated income tax return from Section 139 of the Income-tax Act. While Section 139(1) states that people who have to mandatorily file ITR includes (a) a company/a firm/an LLP irrespective of quantum of their income and (b) any other individual whose total income exceeds the maximum amount of the basic exemption limit.

Well! This was enough regarding the penalties of late ITR filing. Now, let’s see how to file your Income Tax Returns Online.

Procedure to file Income Tax Returns:

Step 1: Collect all the required documents:

 First of all, collect all the documents including Form 16, interest certificates, salary slips, capital gain statements, etc to file your income tax returns. These documents help to compute gross taxable income and provide enough information and details of the tax deducted at source (TDS) from your income in Financial Year 2018-19.

Form 16 is given by the employer if TDS is deducted from your salary income while Form 16A is issued by the bank for the purpose of TDS deducted on interest payment on fixed deposits. Make sure that all the TDS certificates are in the TRACES format and are signed digitally. In case you have redeemed mutual fund units in the Financial Year 2018-19, don’t forget to ask for your transaction statement and capital gains statement from the mutual fund.

Step 2: Download Form 26AS:

Form 26AS is a tax passbook that contains all the details regarding the tax deducted from the income of the taxpayer during the FY 2018-19. Make sure to cross-check the TDS certificates with Form 26AS to ensure that the tax deducted from your incomes was deposited within the government and against your PAN.

Form 26AS can be downloaded from the TRACES website.

Visit E-filling website> Log in your account>select ‘My Account’ option >click on ‘View Form 26AS’. Further, you would be redirected to the TRACES website to view and download the Form 26AS.

Step 3: Compute your total income and tax liability for the FY 2018-2019:

Once you have followed the entire above-given step and have collected all the documents and verified the taxes deducted from your income, now you can move ahead to compute your total income chargeable to tax.

It can be computed by adding income from five different heads and by claiming all the relevant deductions as per the Income Tax Act, 1961 and setting off losses (if any).

After that, calculate your tax liability by applying the tax rates as per your income slab. The income tax slabs are the same as the previous years.

Step 4: File ITR:

In case you want to claim any tax refund from the tax department, you can only do it by filing your ITR. Therefore, an individual should file ITR even if he/she is not required to do so or not having tax payable income. While filing ITR, make sure to choose a correct form or else it would be termed as “defective return” and you would have to do it all again!

Income tax department makes sure to notify Income Tax Return forms for every assessment year. The assessment year is noted as the year following the financial year for which the ITR is to be filed. For instance assessment year for FY 2018-19, is 2019-20.

You can easily file your ITR by downloading the software in JAVA or Excel utility. The taxpayers who have eligibility to file ITR-1 and ITR-4 can file it online without downloading the software utility.

Step 5: ITR Verification:

The last step you need to follow is ITR verification. There are 6 ways in which you can verify your ITR. 5 are electronic one is the physical verification method. ITR verification can be done till 120 days of filing your ITR otherwise it would deem which means you have not to file any ITR.

If an individual forgets to file his/her ITR before the deadline, he/she can file a request to their assessing officer.

So, this was all about filing Income Tax Returns. Do you have a query? Mention it below!