Save Penalty on Income Tax Return Filing on Due Date

With relaxation in compliance norms for the corporate sector, the Government of India did announce for some effective policy measures for individuals and corporate entities to keep their business going and balance their compliance obligations during this time of the pandemic. In respite of the COVID-19 pandemic, the Finance Minister Nirmala Sitharaman in April 2020 announced to extend the due date for filing Income Tax Return for the AY 2020 -21to 30^th November 2020 which was to be filed on 31^st July 2020.

Due Date for Filling Income Tax Return for AY 2020-2021 (FY – 2019-2020)
Particular	Due Date
For all taxpayers on whom audit provisions are not applied	30th November 2020
For all taxpayers (inc. companies) on whom audit provisions are applicable	31st October 2020

To file a return of Income tax is the responsibility of every Indian citizen. It is obligatory for both individuals and the corporate sector if their income falls above the stated Income Tax exemption limit of government.

If you are a taxpayer or someone who’s looking out for assistance or a comprehensive guide on Income Tax Return filing, then throughout this post you will know all about who’s eligible or obliged to file a return of Income-tax, what all is to be mentioned in an ITR, due dates, Income tax forms and the consequences which one has to face if norms of ITR filing is defaulted or missed. Taxgoal.in is an online tax the consulting firm which embeds industry known professionals including reputed CA/CS/ICWA professionals, Auditors, and legal practitioners. Taxgoal qualifies all barriers of excellence in delivering quality services and advisory on matters related to company compliances, income tax return filing, tax audit, business audits, GST filling, Trademark, patents, business licenses, business registration, documentation, and liasoning.

Income Tax Return Filling – What is ITR?

A return of Income tax is a summarised statement of all sources from where the taxpayer has received some income, gained or reaped some profits, or has acquired losses during a financial year. It is necessary for every taxpayer to file an ITR annually to the government. It includes a detailed summary of the taxpayer about:

1. Income from Business / Profession
2. Income from Property (Capital Gains, Rent, etc )
3. Income from all Other Sources.

ITR is to be filed before the specified due date as announced by the Income Tax Department.

Income Tax Return Filing – Am I Eligible to file ITR?

As per the Income Tax Law, it is the duty of every Indian citizen to file an Income Tax Return annually to the government. Income Tax Return is filed to suffice income details to the government if his income is above the stated exemption limit of government (For ex: Exemption limit for FY 2019-2020 is Rs 2.5 lakh). While as per the IT Act, a taxpayer shall also have to mandatorily file an ITR if is obliged to do so by any provision of the act or if he is directed by any officer or any government official within the constraints of the law. The law provides the following criteria for Indian citizens to file an ITR annually on a mandatory basis:

	ITR Filling Eligibility for FY 2019-2020 (AY 2020-21)
For Individuals	Condition
S.no	Age	Income	ITR Applicability
1.	Age < 60 Years	Income > 2.5 lakh	Applicable
2.	Age > 60 Years Age < 80 Years	Income >  3 lakh	Applicable
3.	Age >80 Years	Income > 5 lakh	Applicable
Other criteria   1. If TDS has been deducted and the taxpayer needs a refund. 2. Has some reportable transactions like income from capital gain, property, or financial interest outside India. 3. If the taxpayer carries forward losses. 4. If specifically, a notice has been issued to the taxpayer from the department to furnish an Income tax return

ITR Filling Eligibility for FY 2019-2020 (AY 2020-21)
For Corporate entities
1. Income Tax Return is to be filed by HUF(Hindu Undivided Family ), Sole Proprietorship, Partnership, Company, etc. 2. If the entity has earned profit or loss in business. 3. If any other entity as per any legislation or the IT Act is abiding to file an ITR online.
Note: There can also be some different criteria applicable to individuals or corporate entities within which they have to file an Income Tax Return online.

Income Tax Return Filling – Why should I file ITR?

An Income tax return is conclusive proof of Income of a taxpayer. It is considered as a valid document for many government agencies, banks, loan institutions, and entities to trust the taxpayer before granting him any loan, financial aid, or any benefit. While if the taxpayer has income below the exemption limit of income as stated in the tax slab of government, then he is not obliged to file an ITR. But it is always advisable to go for filling of ITR even if it is not applicable, as the taxpayer with a filling of an ITR of his income he is entitled to avail all the linked benefits which are being provided by the government and other agencies. Some linked benefits of filing a return of Income Tax is:

1. To avail easy credit from financial institutions. Usually, less formalities have to be done to avail subsidized loans when ITR is submitted as proof of Income.

2. To claim tax refunds from government, if excess TDS(Tax Deducted at Source ) has been deducted from your FD savings or Investment income etc;

3. To claim discounts or benefits on insurance cover policies, health plans, and medical policies.

4. To claim preference in government projects and tenders.

5. To entitle yourself or your business “legally complied “

Note: Income Tax Return is a crucial document to hold, it is required in all aspects of financial transactions and beholds long term financial benefits. Also, it can be asked by the department officials or government if the taxpayer is held liable to pay Income Tax at a later stage. Hence, it is advisable to file an Income Tax Return annually to keep a legally entitled record of Your Income affairs.

Forms for Income Tax Return Filling India

To simplify compliance work for taxpayers, the Income-tax department has notified for different tax forms for different category of taxpayers to file their Income tax return online as per their eligibility or conditions of IT law as applicable.

Income Tax Return Forms to file for AY 2020-21 (FY 2019-2020)

Forms	Applicability Criteria
ITR -1 SAHAJ	ITR -1 SAHAJ is specifically for Individuals taxpayers having income up to Rs 50 lakh from l  Salary / Pension & ; l  Income from Agriculture land up to Rs 5 thousand and ; l  Income from one house property &; l  Income from Lottery Winnings, Race betting, etc &; l  Incomes from sources referred in Section 115BBDA or Section 115BBE.
ITR – 2	ITR -2 is specifically for Individuals and HUFs (Hindu Undivided Family ) not having income from profits and gains of business or profession but assessed to pay Income tax as per Rule 12 of the Income Tax Rules, 1962.
ITR – 3	ITR -2 is specifically for Individuals and HUFs (Hindu Undivided Family ) having income from profits and gains of business or profession and assessable to pay Income tax as per Rule 12 of the Income Tax Rules, 1962.
ITR – 4 SUGAM	ITR – 4 SUGAM has to be filed by Individuals, HUF(Hindu Undivided Family ) and Firms (other than Limited liability partnership )being a resident of India and having : Income up to Rs 50 lakh from Business or Profession computed under Section 44AD, 44ADA or 44AE.   But not to be filed by an individual who is either Director in a company or has invested in unlisted equity shares.
ITR – 5	ITR -5 is specifically for persons including AOPs (Association of Persons), LLPs (Limited Liability Partnership firms), BOIs (Body of Individuals ) or other entities taxable under law other than these : l  Individuals l  HUF l  Company  l  Person filling ITR-7
ITR – 6	ITR- 6 is specifically for Companies other than for companies filling exemption under Section 11
ITR – 7	ITR – 7 is specifically for Companies, including those who are required to file ITR under section 139(4A) or Section 139(4B) or Section 139 (4C) or Section 139 (4D).

Income Tax Return Filling - Due Dates for Filing Income Tax Return

A Return of Income tax is to be filed on or before the “due date” notified by the Income Tax Department. The Tax department notifies for the due date for filing return which usually has to be filed by the 31^st July of the preceding year (“Assessment year”). For instance, ITR for FY 2018-19 was to be filed by 31^st July 2019 (AY 2019-2020).

In case, the taxpayer by way of any special notice or intimation of the appropriate official of the department has been directed to file ITR by some particular due date or period. The taxpayer then shall have to file the Income-tax return as per the directions of the officials.

Income Tax Return Filling - Penalties or Consequences for Filling Income Tax Return

Filling of Income Tax Return is obligatory for all taxpayers held taxable as per the IT Act. The Act also provides for strict provisions and for application of penal fines and consequences for non –filling of Income-tax return or for non-compliance of Income-tax act rules are applicable in respect of ITR Filling.

As per the Income Tax Act, 1961 the following penal consequences shall have to be dealt with, in case if you failed to file ITR for AY 2020-2021.

• For non-filling of ITR by notified due date, a penal fine of Rs 10,000 as per Section 234F shall become applicable to the taxpayer. After payment of which the taxpayer shall be allowed to file a belated return. However, such a penalty shall not have to be filed in case of exempted income limit.

• For non-filling of ITR as per Section 139, you shall be liable to pay Interest of the liable tax amount.

• For non-filling delayed filling or non-compliance of any provision in respect of ITR filling, the taxpayer can be issued as an intimation of prosecution, can be imprisoned for a minimum tenure which either is 3 months or can be even 2 years.

• If the amount of tax evasion is more than Rs 25 lakh, then the taxpayer can even be imprisoned for a period of 6 months to even 7 years.

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