Consequences of Not Filing Income Tax Return

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The deadline to file income tax return (ITR) for this financial year (FY 2019-20) has been extended twice, first from July 31 to November 30, 2020 and then to December 31, 2020.

Now, if for some reason you still do not manage to file your ITR before the deadline, here is what will happen:

    • Penalty for Late Filing u/s 234F
    • Reduced Time for Revising Your Return
    • Payment of Interest
    • Carry Forward of Losses is Not Permitted
    • Delay in Receiving Refunds

“The last day to file your Income Tax Return for the FY 2019-20 is 31.3.2021”


Any person eligible to file ITR but fails to furnish the same for FY 2019-20 (AY 2020-21) within the due date u/s 139(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the IT Act’) may file the return alongwith additional interest and late fees within the extended deadline of March 31, 2021.

However, in case the return of income is not furnished by March 31, 2021, such return would be considered as time barred and the taxpayer would not be able to file the tax return for the said assessment year, as the Income Tax utilities would not allow any provision for filing time barred returns!

In case an assessee has taxable income but fails to file return of income, the consequence may be sever, especially if the motive of non-filing is Tax Evasion!

In case the taxpayer has taxable income and the taxpayer fails to file his return of income, then there are enabling provisions to levy penalty u/s 270A for equivalent to 50 per cent of the tax which may have been avoided by the taxpayer by way of such non furnishing of income tax return. Further, the Income Tax authority has a power to initiate prosecution u/s 276CC of the IT Act in case of such defaulting taxpayer who would be subjected to a rigorous imprisonment for a term which shall not be less than 3 months but which may extend to two years and alongwith fine. Also, in case if the tax likely to have been evaded exceeds Rs 25,00,000 had such failure of non furnishing of return not been discovered, the term of imprisonment may range from 6 month to 7 years alongwith a fine. However, no such prosecution can be initiated where the tax sought to be evaded is upto Rs 10,000.

Note: Section 119(2)(b) provides the Income Tax authority with the power to admit any application or claim for any exemption, deduction, refund or any other relief even after the expiry of the period specified under the IT Act. Thus, the taxpayers who fail to furnish their return of income for AY 2020-21 by 31 March 2021 may in genuine cases of delay consider to apply to the Income tax authority for condonation of such delay after showing sufficient and reasonable cause for such delay. This, of course, is a discretionary power and grant of such relief may be on case to case basis.

Know about: Belated Filing of Income Tax Return FY 2019-20

Apart from the aforementioned consequences, the additional consequences for not furnishing the return within the due date as mentioned u/s 139(1) of the IT Act may also be made applicable on the taxpayer whenever he/she furnishes the return after obtaining approval u/s 119 of the IT Act (unless exempted by the Income tax authority u/s 119 of the IT Act) which are listed below:

  • Late Filing Fees u/s 271F of the IT Act amounting to Rs 10,000 for AY 2020-21 where such return is filed beyond the due date u/s 139(1) of the IT Act. However, if the total income of the taxpayer is upto Rs 5,00,000, such late fees would be restricted to Rs 1,000.
  • Additional interest u/s 234A of the IT Act would be applicable @ 1 per cent per month or part of the month for the amount of tax remaining unpaid.
  • More importantly, the taxpayer would also lose out on certain deductions and/or set off and carry forward of losses (other than house property loss) as a result of filing the return beyond the due date prescribed u/s 139(1) of the IT Act.

So, in case you haven’t filed the ITR yet, it’s better not to wait for the last date or hope for a date extension and file the return as early as possible. Register now for ITR Filing at Onlineideation, click on the button below:

Click here to redirect to our ITR Services


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