Income tax returns filing: Not filing your ITR? You will have to pay this massive penalty

Income tax returns filing: Have you filed your ITR yet? If not, you should know a huge penalty is coming your way, not only in terms of money, but also certain restrictions in tax deductions and exemptions too! 

This assessment year on (AY19), the Income Tax department has hiked the penalty for not filing income tax returns within the deadline of July 31, which can go as high as Rs 10,000 - the deadline has been extended by a month now, though.

"With effect from AY 2018-19, the income tax law provides for levy of late filing fee where the return of income is not filed by the due date.  Such late filing fee is applicable on all taxpayers who are required to file tax returns," said Sanjay Agarwal, Partner at TASS Advisors LLP.

To elaborate, if your taxable income is below Rs 250,000 (the threshold limit below which income is not taxable), then such fee is not applicable as you file your return voluntarily. However, if your taxable income goes above Rs 250,000 and below 500,000, then the late filing fee of Rs 1,000 will be applicable to you.

For all other taxpayers with taxable income above Rs 500,000, the late filing fee is prescribed as 5,000, which shall be enhanced to Rs 10,000 where the return is filed after December 31, 2018.

Besides the monetary penalty, there are certain other repercussions of non-filing ITR within the prescribed deadline.

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"One of the most important adverse consequences is the denial of carrying forward your losses (other than house property loss) in subsequent years, said Agarwal of TASS Advisors. In addition, tax payers cannot avail some of section 80 prescribed deductions if ITR if not filed within the prescribed deadline, he added. 

NOTE: The income tax returns filing deadline has been extended by one month.