All you need to know when you have not filed your income tax return.

Last Updated at: Jan 03, 2020

If you fail to file the income tax returns and there is some tax due at the end of the financial year, then you will have to pay an extra amount of interest. Being a business owner, you need to complete some vital tasks before the financial year approaches. With this, you will be able to keep away from paying additional taxes.

If one is in the taxable group, then he/she must file income tax return (ITR). The Income Tax Department always puts up deadlines and reminds it’s taxpayers to file the income tax return on time. It is always better to pay the tax return on the time and avoid any kind of last rush. In case if one has missed the prescribed deadline, they can still file the income tax return but in that situation, they might need to pay a penalty of up to Rs.10,000. And also due to the delay in filing of income tax return, one might be held liable to pay interest.

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Here are five things one needs to know if the income tax return is not filed:


A three-tier fee system has been announced for not filing the income tax return within the due date. If the tax return is filed beyond due date but before December 31, then the fine payable will be Rs.5,000 whereas in other situations it will be Rs.10,000. However, in the situations where the taxpayers whose total income does not exceed Rs.5,00,000, the fine payable shall be limited to Rs.1,000.

Revising income tax return

For example, if a person is filing the ITR and has made a mistake, under the present rules, he has time only till March 2019 to rectify the mistake that he has made (for ITRs for FY 2017-18). Previously, taxpayers had two years time to revise and resubmit an ITR that had mistakes, which has now been reduced to one year from the end of the financial year. Hence, the earlier one files the ITR, the longer would be the time available to them for revising their returns to rectify the errors if there are any.

Payment of interest on the tax amount

When the income tax return is not filed on time, an interest at the rate of one percent per month or part of the month is imposed up to the date of filing the ITR. The said interest is payable on the tax payable after the deduction of the TDS (tax deducted at source), TCS (tax collected at source), advance tax and other reliefs or tax credits present in the law. TDS is deducted by the buyer or the payer while TCS is collected by receiver or payee or seller.

No carry forward of losses

If the income tax return is not filed on time, the taxpayer is not allowed to carry forward any kind of loss under the head “profits and gains of the business or profession” or “capital gains”. Nevertheless, unabsorbed devaluation and loss under the head “income from the house property” will be allowed to be carried forward.

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Delay in the processing of return of income

Once the tax return is filed and the authentication of the same is duly completed, the Central Processing Centre, Bangalore, of the Income Tax Department will process the income tax return. Only at this point in time, the tax liability or refund of the taxpayer is determined. Thus, in the situation where the taxpayer is claiming a refund, delay in filing of income tax return will result into a delayed receipt of the tax refund.

It is thus always suggested for every taxpayer to file their income tax return (ITR) on the time and avoid numerous consequences including levy of mandatory fee.

With the implementation of the strict laws associated with income tax, it is better to fulfill the tax obligation before it is too late. The Union Budget has also reduced the time period, so you should evaluate the tax before it is too late. Failing to do so can harm the reputation of your organization.