If your income is above Rs 2.5 lakh per annum, you have to file an Income Tax Return. There are penalties if one fails to file the ITR before the last date, July 31.
The deadline applies to people who do not have gotten their tax accounts audited. If your income is below Rs 2.5 lakh per annum, you must still file the ITR for financial planning. These include holding a foreign asset or earning foreign income, paying an electricity bill of over Rs 1 lakh in the previous year, depositing over Rs 1 crore in the bank, and paying over Rs 2 lakh on foreign travel in the applicable year.
If the income is above Rs 2.5 lakh per annum, you are required to file the ITR to avoid penalties. There are several penalties—listed below–if one fails to file the ITR before the last date. They will have to forego various relaxations.
Also read: ITR 2021-22: List of transactions needed to furnish your tax return
If you miss the deadline of July 31, 2022, you can still file the document by December 31, 2022. However, you will have to pay a late fee.
If the yearly income is above Rs 5 lakh per annum, your late fees will be Rs 5,000. If the income is below Rs 5 lakh per annum, the late fee is Rs 1,000.
Interest on unpaid tax
If there is an unpaid income tax after July 31, 2022, an interest of 1 per cent is applicable on the outstanding amount. This is irrespective of whether the tax amount was filed wrong mistakenly or not.
The taxpayer will have to deposit the outstanding tax along with the interest, retrospectively from July 31.
Along with this, if the outstanding tax is paid on or after the 5th of any month, the interest of the full month will have to be paid.
Carry forward the losses
Taxpayers are allowed to reduce their liability by offsetting the losses from business operations or the sale of property against other incomes. The losses are allowed to be carried to subsequent years.
However, it is not applicable in the case of a belated ITR. The losses can only be carried forward if the ITR is filed before July 31, 2022.