Missed ITR Deadline- Here’s What You Should Do

Missed ITR Deadline- Here’s What You Should Do-New

If given a choice, most of us wouldn’t even want to pay tax on the income we earn. But we should. As citizens of India, it is our rightful duty to pay taxes as we are also consumers of the country’s public infrastructure and facilities, and income tax is an important source of revenue for the government. So, it is our responsibility to contribute towards building and maintaining the public infrastructure. Paying income tax and filing income tax returns on time ensure that.

The best time to start planning your tax-saving investments is at the beginning of the financial year. Most taxpayers procrastinate till the last quarter of the year, resulting in hurried decisions. Instead, if you plan at the start of the year, your investments can compound and help you achieve long-term goals. Remember, tax-saving should be an additional perk and not a goal in itself.

But, if you are reading this, it means you have already missed the last date to file the returns for the said A.Y. 2019-20. Being a registered taxpayer with the Income Tax department, a lot of reminder e-mails and text messages are send literally every other day to file your tax returns before August 31, 2019. The government had extended the last date for filing the returns for FY 2018-19 from July 31 to August 31. This was done in a bid to increase tax compliance and incentivise citizens to file their returns without being penalised.

Can you still file ITR?

The answer is yes, even after the extended return filing time period, you could still file your overdue tax returns for the previous financial year, but this obviously comes with a penalty for late filing. The penalty is levied as per Section 234F according to which an individual would have to pay a fine along with the tax liability. Please note that if the taxes have been paid and only filing the ITR is pending, then there will not be any Interest Implications. 

What is the Penalty Amount?

In accordance to Section 139(1) of the Finance Act, if return after due date (belated return) is filed but before December 31, 2019, the penalty will be Rs 5000.  In cases, where the returns are filed on or after January 1, 2020 but before the end of the Assessment Year (i.e March 31, 2020) the penalty shall be Rs 10,000. However, where the declared income is below Rs 500,000, the amount of penalty shall be Rs 1000.  Along with the penalty, you may also have to pay interest at 1% per month or part of the month, on tax due under Section 234A. The interest rate is calculated from the end of the deadline to the actual date of filing returns on a simple interest basis.

How to file belated returns

The procedure to file belated returns is the same as filing the return on or before the due date. The only difference is while filing belated returns you have to select Return filed under section 139(4) from the given drop-down menu.  

Once you have filed your returns, you will have to verify it as well (ITR-V). The IT department only starts processing your returns once you do so. You have 120 days from the date of filing to get the returns verified. You can e-verify the returns via multiple channels, such as the Income Tax website, Aadhaar OTP or net banking channels. Refunds, if any, will be processed only for returns that have been verified. 

Our Suggestions for you

Even though the tax department has a provision for filing belated returns, it is best to adhere to the mentioned timelines. Although the above-mentioned solution might help you file the return every time you are late on filing your ITR, filing returns after the deadline may create some additional issues for you. Some of the issues in late filings are mentioned as below:

  1. Losses under any head of income other than those from house property cannot be carried forward if the taxes have not been filed before the due date. This becomes especially critical for individuals with operating business losses or that of capital gains 
  2. Your refunds could get delayed further. 
  3. The IT Department may take more time in processing your returns
  4. Not only would you incur a penalty plus interest on your tax obligation, it could also bring you under scrutiny 

How does VSRK tax advisory help you with tax planning and filings?

We, at VSRK are a team of highly trained Taxation professionals. We are one of the best Tax Planning Company in Delhi providing Online Tax Advisory Services to all our clients. We are a well known name Tax Advisory Services in Delhi NCR.

What Are The Highlights Of The Budget 2020-21 Related To Direct Tax?

What Are The Highlights Of The Budget 2020-21 Related To Direct Tax

On 1st February, The Finance Minister of India announces the Annual Budget 20020-21 which included a lot of measures to revive our slow economy. This was inclusive of various short term, medium and long term measures.  The following actions were made in Direct Tax:

One of the major changes that were proposed to stimulate growth, simplify tax structure, bring ease of compliance, and reduce litigations and thereby provide significant relief to middle class taxpayers. 

The New and simplified personal income tax regime proposed is as follows: 

0-2.5 Lakh  Exempt  Exempt 
2.5-5 Lakh  5%  5% 
5-7.5 Lakh  20%  10% 
7.5-10 Lakh  20%  15% 
10-12.5 Lakh  30%  20% 
12.5-15 Lakh  30%  25% 
Above 15 Lakh  30%  30% 

However, there is one set back of the new scheme, the tax payers in the new regime would not be allowed to claim around 70 of the existing exemptions and deductions (more than 100) would be removed. 

However, please note that the new tax regime is optional and that an individual has the option to continue to either opt the new scheme or pay tax as per the old regime and avail deductions and exemptions. This bold step of the government would cost them estimated revenue forgone of Rs. 40,000 crore per year. 

In addition to the above, measures to pre-fill the income tax return are initiated so that an individual who opts for the new regime gets pre-filled income tax returns and would need no expert assistance to pay income tax. 

Apart from the above the following changes are also entailed: 

  1. Corporate Tax: 

Tax rate of 15% extended to new electricity generation companies. 

Indian corporate tax rates now amongst the lowest in the world. 

2. Dividend Distribution Tax (DDT): 

DDT has been removed in the hands of the corporate making India a more attractive investment destination. Deductions will be allowed for dividend received by holding company from its subsidiary. Please note that the dividend would be taxable in the hands of the investors.

3. Start-ups: 

Start-ups with turnover up to Rs. 100 crore to enjoy 100% deduction for 3 consecutive assessment years out of 10 years.  Tax payment on ESOPs has been deferred. 

4. MSMEs to boost less-cash economy: 

Turnover threshold for audit has been increased to Rs. 5 crore from Rs. 1 crore for businesses carrying out less than 5% business transactions in cash.

5. Cooperatives: 

Since cooperatives are an important instrument of growth of an economy, option to cooperative societies to be taxed at 22% + 10% surcharge and 4% cess with no exemption/deductions is given in order to bring parity brought between cooperatives and corporate sector. 

Also, Cooperative societies exempted from Alternate Minimum Tax (AMT) just like Companies are exempted from the Minimum Alternate Tax (MAT).

6. Tax concession for foreign investments: 

For boosting foreign investment 100% tax exemption to the interest, dividend and capital gains income on investment made in infrastructure and priority sectors before 31st March, 2024 with a minimum lock-in period of 3 years by the Sovereign Wealth Fund of foreign governments has been given. 

7. Affordable housing: 

The additional deduction up to Rs. 1.5 lakhs for interest paid on loans taken for an affordable house has been extended till 31st March, 2021. Date of approval of affordable housing projects for availing tax holiday on profits earned by developers extended till 31st March, 2021. 

What are the Tax Facilitation Measures? 

    • Now Instant PAN would be allotted online through Aadhaar. 
    • Under the Finance Minister’s ‘Vivad Se Vishwas’ scheme, with a deadline of 30th June, 2020, to reduce litigations in direct taxes: 
    • Waiver of interest and penalty – only disputed taxes to be paid for payments till 31st March, 2020. 
    • Additional amount to be paid if availed after 31st March, 2020. 
    • Benefits to taxpayers in whose cases appeals are pending at any level. 
    • In order to reducte corruption and bring transparency in governmental operations faceless appeals to be enabled by amending the Income Tax Act. 
    • For charity institutions: 
    • Unique registration number (URN) would be issued to all new and existing charity institutions. 
    • Pre-filling in return through information of donations furnished by the Donee. 
    • Process of registration would be made completely electronic. 
    • Provisional registration to be allowed for new charity institutions for three years. 
    • CBDT to adopt a Taxpayers’ Charter. 

How does VSRK help you with the new tax planning and filings?

We, at VSRK are a team of highly trained Taxation professionals. We are one of the Best Tax Planning Company in Delhi providing Online Tax Planning Services to all our clients. We are a well-known name for Tax Planning Services in Delhi NCR. As per the new scheme Income Tax Payers has the option to choose between the 2 schemes. We step herein and help you to calculate the amount of taxes, applicable deductions and exemptions in order to assist you in tax-planning and filings and saving you the hassles to compare between the two regimes of the Income Tax. Being a Best Tax Planning Company in Delhi, we provide the best tax planning advisory.

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