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Are you unsure about whether you should file an income tax return in India? Read on to know more.
Undeniably, the arrival of online or electronic income tax return filing portals (other than that of the government’s) has made the ITR filing process fairly quick and convenient in the last few years. However, many taxpayers and retirees still find the procedure daunting and tedious and can find numerous excuses to postpone this activity.
Until Assessment Year (AY) 2017-18, you could get away with putting this off even after the D-day 31 August. Now, there are some legal consequences for late filing and evasion, which this article will explore.
Let’s understand whether you are required to file an income tax return in India for FY 2020-21
NRI or not, any individual whose income exceeds Rs. 2.5 lakhs (for FY 2020-21) is required to file an income tax return in India. Please note that for an NRI, income earned or accrued in India is taxable in India.
A significantly large number of returns are e-filed and gradually the income tax department is hoping to bring all returns online.
It is mandatory to file the income tax returns online for all the registered taxpayers whose taxable income. However, paper returns can be filed by those who are above 80 years of age and do not have any income from regular business or profession.
Under section 271F, the assessing officer may levy a penalty of Rs 5.000 when you have not filed your return. (applicable until FY 2016-17).
From FY 2017-18 onwards, penalties for non-filing an income tax return are as follows:
Note: Penalty is limited to Rs 1,000 for those with income up to Rs 5 lakhs. These provisions are covered under a new Section 234F.
Form FY 2020-21 onwards, the maximum amount payable on late filing of return is reduced to Rs 5,000.
Hence, from FY 2020-21 onwards, if the taxpayer file income tax return after the due date, a penalty of up to Rs 5,000 shall be paid. However, there is no change in penalty amount of the taxpayers with income below Rs 5 lakhs, i.e. the penalty is Rs 1,000.