What happens if you don’t file ITR by 31 March 



  • For the current assessment year (AY 2021-22), 31 March is the last date to file an ITR and missing this deadline can spell trouble for taxpayers

For taxpayers who fail to file their Income Tax Return (ITR) within the due date, which was 31 December 2021 for the current fiscal, the income tax law allows a three-month window to file belated ITR. For the current assessment year (AY 2021-22), 31 March is the last date to file an ITR and missing this deadline can spell trouble for taxpayers.

“Belated return can be seen as a last chance to voluntarily file ITR. If you miss the due date for filing a belated return, you lose the opportunity to voluntarily file ITR and can only file it in case of scrutiny initiated by the tax department," said Neeraj Agarwala, partner, Nangia Andersen LLP.

Scrutiny after the belated timeline can come to you under either section 142(1) or 148, explained Poorva Prakash, partner, Deloitte India. “Notice under 142(1) is a general show cause notice which is sent by an assessing officer (AO) when they want taxpayers to file their ITRs," she said. This typically applies to taxpayers who have income below minimum taxable income threshold but are liable to file ITR as they might have foreign assets or refund to claim. “Notice under section 148 is issued when the AO believes income has escaped assessment (as the ITR is not filed). In this case, penalty can be levied at 50% or can go up to 200% of the total tax payable," said Prakash.

Interest of 1% per month on outstanding tax under section 234A gets triggered when a taxpayer doesn’t file ITR by the due date. For outstanding tax above 1 lakh, 234A kicked in after the original due date of 31 July 2021. “Even if the taxpayer has paid the outstanding tax as either self-assessment tax or advance tax but not filed return of income, interest under 234A will accrue till the time ITR is filed," said Prakash. This will continue to accrue post 31 March also till you file a deferred ITR after receiving a show cause notice from the I-T department.

Prakash said the authorities may even initiate prosecution proceedings if there was no sufficient cause for such a non-compliance. Agarwala said “Prosecution under section 276CC can be initiated wherein the taxpayer may be subjected to a rigorous imprisonment for a term ranging from minimum 3 months to two years along with fine, depending on the amount of tax evaded."

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