If a person is unable to file their Income Tax Return by the due date, the last date for filing income tax returns for AY 2021-22 is March 31, 2022, according to Section 139(4). Section 139(4) states that if you fail to file your ITR by the due date, you can file a belated return with a penalty of up to Rs 10,000 in various cases.
Whereas a late return can be filed before the end of the assessment year or before the assessment is made, whichever comes first. An assessee may be unable to file its return on time for a variety of reasons.
After the time limit has expired, the Department of Income Tax may authorize any income-tax authority to accept an application or claim for a deduction, exemption, refund, or other relief under the Income Tax Act. If the CBDT believes that an application or claim is made in good faith, it will authorize income tax authorities to accept it.
The following are some major points covered by Section 119(2)(b):
If the amount claimed for refund is less than Rs. 10 lakhs, the Principal Commissioner/Commissioner has the authority to accept or reject the application filed under Section 119(2)(b)
If the refund claimed is more than Rs. 10 lakhs but less than Rs. 50 lakhs, the Principal Chief Commissioner/Chief Commissioner has the authority to accept or reject the application filed under Section 119(2)(b).
If the claimed refund exceeds Rs. 50 lakhs, the CBDT will consider the application.
After six years from the end of the assessment year for which the application is made, an assessee cannot file an application.
The competent authority must respond to an application within 6 months. There will be no interest charged on such a refund.
The refund must be due to an excess of TDS/TCS, Self-Assessment tax, or Advance tax.
The following procedure should be followed by an assessee when filing an application under section 119(2)(b) -
If an assessee has a valid reason for failing to file an ITR by the due date, he or she can file a manual application with the jurisdictional chief commissioner/principal chief commissioner of income tax.
After verifying the information submitted by the assessee, the commissioner or principal commissioner, as the case may be, shall issue an order under section 119(2)(b). This order will be accessible via the 'e-proceeding' tab, and an email will be sent to the assessee's registered email address.
Any person with taxable income is required by law to file a tax return. Regardless of whether or not the tax has been paid, a return must be filed. If the employer deducts and submits tax, the employee must file a tax return. As previously stated, the tax liability is dual. Income above Rs.2 Lakhs is currently taxable.
People with lower incomes are not barred from filing a tax return. Anyone with any income, even if it is less than the exemption limit, is eligible to file an income tax return. Although such a person is not legally required to do so, and no penalty would be imposed on such a person, such as those who earn more than the exemption limit.
However, there are additional advantages. For starters, filing returns aids in the adjustment of accounts with the government. If any additional tax is paid, the government will refund it only after the return is filed. If a loss occurs during the year, filing a return helps to reduce the tax that the IT department would otherwise charge based on the information submitted in the previous year. As a result, if revenues are inconsistent, a business owner must file returns on a regular basis.
Another significant advantage of filing returns is that they serve as proof of income. The income tax return is a recognized proof of income that is used by almost every authority that needs to verify a person's income. This proof, in turn, aids in a variety of ways, including:
Loans- A bank grants loans only after a thorough examination of the individual's income. The bank wants to be certain of the sources of income in order to be confident that the loan will be repaid. As a result, it is difficult to obtain loans without a return of income file.
Insurance/accidental claims- When awarding claims, the courts consider the person's income. In such cases, the courts look to the income tax return as proof of income and award the claims accordingly.
Obtaining a visa, government tenders, jobs, startup funding, and so on all require proof of income, which the income tax return is.
However, there is some leeway, and a delay may not result in an immediate and irreversible penalty. Filing a Condonation of Delay is a relief granted to an individual or party who fails to file an appeal or suit within the Limitation Period. Section 5 of the Limitation Act of 1963 states that the Court may accept the party's Condonation of Delay appeal if they can produce obvious causes and circumstances that are deemed excusable under the Court's ordinance.
To ensure timely filing of returns and avoid date clashes among the country's jamboree of assesses, the tax department of India has defined some varied last dates up to which a person can file the return, depending on their category- viz.
Individual,
HUF, Firm, LLP, etc.
Trust and the company
AOP/BOI, as well as audit applicability
For example, in fiscal year 2021-2022,
Individuals and HUF (professionals or individuals, small businesses with non-audit cases) have until July 31, 2022, to file their income tax returns. Because most audit reports must be completed by September 30, 2022, audit-required partner cases must be filed by October 31, 2022.
Companies, trusts, and political parties are also expected to file their income tax returns by October 31, 2022, in order for their accounts to be audited.
In exceptional circumstances, such as the recent pandemic, due dates are pushed back to three months (December 31st) before the end of the fiscal year (31st March).
There is a provision for submitting a revised file of income tax return if the assessee discovers an error or incorrect data in the original.
Unless extended, the government requires taxpayers to file the ITR until the end of the assessment year (AY) relevant to the fiscal year (FY). A generous four-month window is opened for the party to consolidate the income details for the fiscal year, which takes only minutes. The income tax return file contains an annual record of one's income, tax liability, tax paid, and investments for the relevant fiscal year, which is collated and submitted to the appropriate authorities.
It is not possible to file an income tax return without first paying tax. He plays for as long as one waits. There are numerous set-offs or consequences for failing to file an income tax return on time. Paying taxes, contrary to popular belief, is not sufficient; failing to meet a return deadline frequently results in legal consequences. A late ITR return (for example, for the fiscal year 2021-2022, if the due date of 31st July is missed, it should be filed before 31st December) would still incur a penalty of Rs 5000. However, taxpayers earning up to Rs 5 lakhs are eligible for a penalty-free exemption of Rs 1000.
One misses out on major benefits such as easy loan approval (vehicle loans, home loans, personal loans, etc.), getting refunds processed faster and easier for extra amounts of tax paid by mistake.
One will also be unable to use the simple method of submitting address and identity proofs required when applying for visas and loans. Before issuing visas, most consulates and embassies require true copies of tax returns from the previous two years.
Penalty and prosecution are two of the most unpleasant consequences, which can be avoided entirely by filing Income Tax Returns on time, a task that takes less than ten minutes.
Losses will not be allowed to be set off or carried forward in subsequent years, refunds and extra tax returns will be delayed, and interest may be charged- under Section 234A- at 1% per month or part thereof on tax due until taxes are paid. Thus, filing returns reflects the ideal and responsible behavior of citizens who are conscious of their societal contributions.