July 31 is near and not many days are left before the deadline to file income tax returns ends. Those who haven’t filed it yet need to buckle up do it without wasting any more time and more importantly to save themselves from penalties or even jail time!
For those, who have filed it already, they should read this to review their returns for any mistakes, which could land them in any unnecessary trouble.
Here’s an easy-to-understand guide for all the taxpayers to cut through the maze of tax laws and help understand who needs to file their returns and what if they don’t.
Currently, the tax department offers two tax regimes- old and new. The tax exemption limit is Rs 2.5 lakh under the old regime and Rs 3 lakh under the new regime, which is now the default regime.
The Budget 2024 has announced further changes to the new tax regime, which will be applicable for the financial year 2024-25.
Who falls under the tax bracket and who doesn’t
-It is mandatory to file ITR for those who have an income above the threshold limit after all the deductions and exemptions
-For FY24, the government has set an exemption limit of Rs 2.5 lakh for individuals below 60 years, Rs 3 lakh for those aged 60 to 80 years, and Rs 5 lakh for those above 80 years
Cases where individuals must file returns even if their taxable income do not cross the exemption limit
- If you have deposited over Rs 1 crore in one or more current bank accounts
-If you have spent over Rs 2 lakh for travelling abroad for yourself or someone else,
-Spent over Rs 1 lakh on electricity bills
-If an individual earns from rental income from properties abroad or has investments in foreign equities
Calculate your income tax for FY 2024-25
For businesses, it is mandatory if
- Total sales, gross receipts, or turnover from a business exceed Rs 60 lakh; in case of professionals if the if the gross receipts from a profession cross Rs 10 lakh
- If the total tax deducted and collected is Rs 25,000 or above (or Rs 50,000 in case of individuals aged 60 or above), or if the aggregate deposits in savings accounts is more than Rs 50 lakh
So, what will happen if you don’t file your return?
The return needs to be filed every year on or before July 31. For the last financial year, the assessment year is 2024-25 and the deadline will end on July 31, 2024.
However, if anyone, due to any reason, fails to file their returns, they will have to shell out extra in the form of fines and penalties. These penalties will depend on the delay and the tax liability of the taxpayer. The tax department allows latecomers to file their taxes by December 31.
-Taxpayers will have to pay late fee with interest if return is being filed after the due date but before the deadline for late filing
-Under section 234A, taxpayer will have to pay a simple interest of 1 percent for every month after the due date till the actual filing of return
-They would also be liable for a late fee of Rs 5,000. For those below an income of Rs 5 lakh, the late filing charge won’t be more than Rs 1,000
-However, failing to file the returns even by December 31 could attract jail time under section 276CC along with hefty fines
-If the tax liability is above Rs 2.5 lakh, the punishment could be a rigorous imprisonment of 6 months, which can be extended up to 7 years along with a fine
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