Income Tax: Taxable income but forgot to file your ITR? Heres what happens

With days to go for the deadline to file income tax returns (ITR), many with incomes more than Rs 2.5 lakh per year do not file their taxes. 

There are also cases where employees with their tax cut by the employers (TDS; Tax Deductible at Source) feel that they need not file their income tax return as it has already been cut by their employer. However, every individual with income over the minimum taxable limit (Rs 2.5 lakh per year in this case) are required by law to file taxes. 

However, in case your TDS is cut and you do not file your income tax return, here's what happens: 

Currently, the penalty for late tax filing is applied as per the provisions of section 271F. The new provision will replace this section from next year which leaves it on the discretion of an assessing officer to levy a penalty of Rs 5,000 if an individual fails to file returns before the end of the relevant assessment year.

In simple terms, as per provisions of Section 139(1) of the Income Tax Act, 1961, every person whose total income exceeds the maximum amount, which is not chargeable to income tax, shall by the due date, file his return of income in prescribed form. Failure to do so by the due date or before the end of relevant assessment year will attract penalty under Section 271F of IT Act 1961, amounting to Rs 5000.