Income tax return filing is a process by which individuals and entities report their taxable income to the government and pay the tax due on that income. In India, income tax return filing is mandatory for individuals, Hindu Undivided Families (HUFs), and certain other types of entities that meet certain income thresholds. In this article, we will discuss the income tax return filing process in India, including the forms that must be used, the deadlines for filing, and the consequences of non-compliance.
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Forms for Income Tax Return Filing in India
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The income tax return filing process in India is conducted using a series of forms that are prescribed by the government. The forms are numbered ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7. Each of these forms is designed for a specific category of taxpayer, based on factors such as the type of income earned, the sources of income, and the amount of income earned. It is important to use the correct form when filing income tax returns, as using the wrong form can lead to errors and possible penalties.
Deadlines for Income Tax Return Filing in India
The deadlines for filing income tax returns in India vary depending on the category of taxpayer. The following are the key deadlines:
Individuals and HUFs who are not required to undergo a tax audit: The deadline for filing income tax returns for the financial year (FY) 2021-22 is July 31, 2022.
Individuals and HUFs who are required to undergo a tax audit: The deadline for filing income tax returns for FY 2021-22 is October 31, 2022.
Entities such as companies and partnerships: The deadline for filing income tax returns for FY 2021-22 is November 30, 2022.
Late Filing of Income Tax Returns
If an individual or entity fails to file their income tax return within the deadline, they may be subject to penalties and interest charges. The penalty for late filing of income tax returns is Rs. 5,000 for returns filed after the deadline but before December 31 of the assessment year, and Rs. 10,000 for returns filed after December 31 of the assessment year. However, if the total income of the taxpayer does not exceed Rs. 5 lakh, the maximum penalty is Rs. 1,000.
Consequences of Non-Compliance with Income Tax Return Filing
Failing to file income tax returns or filing incorrect returns can result in a number of negative consequences. These include:
- Penalties: As mentioned earlier, taxpayers who fail to file their income tax returns within the deadline may be subject to penalties and interest charges.
- Legal Action: The Income Tax Department may take legal action against taxpayers who fail to file their income tax returns or provide incorrect information. This can include prosecution and imprisonment in extreme cases.
- Inability to obtain loans: Banks and financial institutions often require income tax returns as a proof of income when assessing loan applications. Failure to file income tax returns may lead to the rejection of loan applications.
- Inability to obtain visas: Many countries require income tax returns as a proof of financial stability when assessing visa applications. Failure to file income tax returns may lead to the rejection of visa applications.