NRI Tax Return Filing — Why ITR should be filed before due date?by EzyBiz India Tax & Accounting Consulting Firm
In India, every individual including Non Resident Indians and non-audit assessee are required to prepare and file their annual Income Tax return on or before due date i.e 31st July for income earned during previous financial year. However, for FY 2020-21, owing to COVID pandemic due date for Income Tax return filing has been extended to 31st December 2021.
It is very important for both NRI as well as
Indian Residents to complete ITR filing on or before due date otherwise unnecessary fines and penalties
are levied which may be avoided.
In this write up, we will understand the
consequences of late filing of NRI Tax Return under the Income Tax Act,
1) Losses cannot be carried
In case of late filing of NRI Tax Return,
losses like business loss and capital loss cannot be carried forward to next
year for set off against future year profits. Therefore, this is a serious
consequence of not filing ITR within due date as losses will be lapsed.
Interest u/s 234 A
Late filing of NRI tax return will lead to
interest @ 1% u/s 234A of the Act from due date of Tax Return
filing till date of actual tax return filing.
Penalty u/s 234F
Delay in NRI Tax Return filing
will also attract penalty of Rs
1000 to Rs 10,000. Further, non filing of income Tax return may also lead to
prosecution in some cases.
Delay in getting refund
Any delay in Tax filing in India will result
in late processing of ITR by tax department due to which refunds are also
credited late in the assesses bank account. Accordingly, it is advisable to
file Income Tax return well in advance before due date so that refunds are
credited in the bank account within time.
No Sufficient time for filing tax return
amendment in tax laws, now Income Tax return cannot be filed after end of
relevant assessment even after paying late fees. Previously, the assessee used
to file tax return late after paying late fees but now this option is not
available. Therefore, in case the assessee missed the due date, He would have
very less time for filing ITR.
6) Reminders and Notices from
Late filing of
Income Tax Return would lead to reminder notices from tax authorities. Further,
due to Annual Information Report, nowadays tax authorities are aware of all the
major income earned and expenses incurred by the assessee. Suppose assessee has
earned any income and not filed its tax return, it will result in issuance of
Income tax notice by compliance cell as well as commencement of Income Tax Faceless Assessment
against the assessee.
filing of ITR may also lead to prosecution in some cases by the tax
8) Black Money Act
As per Income tax
Act as well as Black Money Law, any Resident having foreign income or foreign
assests need to disclose the same in his ITR. Failure to do so will lead to
harsh penalties as well as prosecution.
Thus, it may be inferred from above, that firstly, it is very important to file Income Tax Return and also such tax return shall be filed on or before due dates in order to avoid interest, penalty, prosecution and loss of refund and carry forward of losses.
Created on Oct 26th 2021 02:51. Viewed 218 times.