Last Updated on May 25, 2022 by Neera Bhardwaj
Income tax is a direct annual tax imposed by the Government on individuals, businesses, Hindu Undivided Family (HUF), Association of Persons (AOF), and Body of Individuals (BOI) on the income and profits they earn.
In India, a progressive tax system is followed in the case of income tax. This means that the more an entity earns, the more they are taxed. There also exists a slab system where different levels of income are taxed at different rates.
According to the new tax regime, every individual who has earned more than Rs. 2,50,000 is liable to pay taxes in FY 2020-21. All payments (both TDS/TCS payments and non-TDS/TCS payments) can be made using the online portal available on the NSDL website.
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What is an ITR?
An income tax return is a form that is mandatorily required to be filled and submitted by individuals so that they can report to the Government about their earnings and how much tax liability they have each year. ITR is filed for a particular year from 1 April to 31 March of the next year. There are several ITR forms like ITR 1, ITR 2, ITR 3, and so on, each of which serve a different purpose through which individuals can file their returns.
It must be noted that individuals who earn less than Rs. 2,50,000 (and individuals aged below 60) need not file ITR.
Latest information on the ITR deadline
Every year, the Government announces a due date before which all the individuals are supposed to file their returns. For the AY (Assessment Year) 2021-22 or FY (Financial Year) 2020-21, the due date was 30 November 2021 as announced by CBDT (Central Board of Direct Taxes). Later, it was postponed to 31 December 2021 and then to 28 February 2022.
But now, according to the latest announcement, the last day to file returns is 15 March 2022.
The reason for the latest postponement of the due date was cited to be delays caused by the pandemic and the glitches experienced by users while using the online portal for submitting audits. Many chartered accountant associations had appealed for an extension due to the aforementioned reasons.
On 11 January 2022, the CBDT along with the GOI released a new circular that extended due dates for filing Income Tax returns and other reports for audit for AY 2021-2022. Find the circular attached below.
It must be noted that only five categories of taxpayers have received the extension. One of the categories is taxpayers whose accounts are eligible for audit. This category has a 15 March deadline. For taxpayers whose accounts are not eligible for audit, the 31 December 2021 due date still stands.
It was also announced that the due date for audit reports was now 15 February 2022.
What happens when you don’t file for returns before the due date?
If your income is higher than the minimum taxable income (Rs. 5 lakh), you are liable to pay Rs. 5,000 to Rs. 10,000 as late fees. But if your income is less than Rs. 5 lakh, the maximum penalty is Rs. 1,000. You will also lose a few incentives like interest on excess tax paid, the ability to carry forward your losses, and so on. Moreover, if you have unpaid taxes, an interest of 1% per month (simple interest) will be charged on it.
As for the filing of returns, you will have to file belated returns. A belated return can be filed before the end of the relevant assessment year.
It is very important to note that just filing for returns is not enough, you will also have to verify them.
Conclusion
Therefore, It is recommended that you pay your taxes in a timely manner as the interest paid and penalties can pile up and prove to be burdensome. Individuals who file their returns on a timely basis also enjoy a number of benefits like quick refund on excess tax paid, ability to carry forward losses, easier approval for loans and visas, and so on. Consult your tax advisor/CA for professional guidance on taxes.
