Not Filing One's Income Tax Return On Time Incurs Late Filing Charges, Says Section 234F Of Income Tax Act

Under Section 234F of the Income Tax Act, not filing one's Income Tax Return on time incurs late filing charges. If one's total income is over ₹5 lakh, one may incur a fine of ₹5,000. The late fee is ₹1,000 if one's income is under ₹5 lakh. If there are other tax charges or interest, the penalty is higher.

For late filing under Sections 234A, 234B, and 234C, interest will be charged. One will be charged interest on the amount due if one is required to pay tax and has not filed the return in time, which will increase the payable amount. One will be subject to a delay or lose the right to claim the refund of tax if one is entitled to a tax refund but does not file in time.

Timely filing of ITR has benefits, one gains the ability to carry forward certain losses, business losses or capital losses. It is offset against future gains. If the return is not filed within the prescribed due date, this benefit is lost. In subsequent years, this could lead to a higher tax outgo.

Under the Income Tax Act, continuous non-filing or deliberate evasion may attract prosecution. In exceptional cases, individuals may be punished with rigorous imprisonment from three months to two years, with a fine for not filing returns despite receiving reminders. If tax evasion exceeds ₹25 lakh, imprisonment can extend to seven years.

For financial activities like availing of loans, procuring credit cards, or visas, early submission of ITR is normally required. ITR records are used by lenders and foreign nations as proof of income and reliability. Opportunities could be delayed or denied if returns are not submitted.

Even if one earns less than the taxable threshold, it is worthwhile to file an ITR. It is a document of financial integrity and guarantees compliance. The price of neglecting to do it in a timely manner — including penalties, interest, legal risks, and missed benefits — is too much compared to the effort involved in timely compliance.

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