Not filing income tax returns: Nirmala Sitharaman, the Union Finance Minister, reported that the 1 lakh notices sent for not filing income tax returns and misrepresentation of income by government. The minister said, “The notices were sent where the income was found to be close to Rs 50 lakh and they are expected to be cleared by the end of this fiscal.”
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The Central Board of Direct Taxes (CBDT) chairperson, Nitin Gupta, reported that over 4 crore income tax returns (ITR) have been filed for the fiscal year 2022-23, with over half processed, resulting in ₹80 lakh refunds.
However, a shortage of manpower in the income tax department is impeding efforts to achieve better results. Gupta urged Sitharaman to approve the cadre restructuring proposal as soon as possible.
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What happens when your not filing income tax returns?
You must timely file your income tax returns in accordance with the Income Tax Act. If you are not filing income tax returns, you could be subject to severe fines and have trouble acquiring a job, a visa, etc. On the other side, filing your Income Tax Return (ITR) on time gives you access to a number of benefits.
But when you don’t file your ITR on time then you may face the issues like:
1. Interest on the tax amount:
In accordance with Section 234A, if you don’t make your tax payments on time, you will be required to pay interest at the rate of 1% per month on the unpaid tax balance. From the time your tax return for the relevant financial year is filed until the payment deadline, interest is calculated. Here is an illustration to help you comprehend:
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2. No carry forward of losses:
If your investment has suffered a loss, you can use it to reduce your income for the next year. As a result, it will lower your tax obligation for the upcoming fiscal year. Losses must be declared in your ITR by the due date in order to carry them over and offset them. You won’t be able to carry these losses forward and offset them against future gains if your tax return is filed after the deadline. You can, however, carry on the losses incurred in relation to real estate.
3. Penalty charges:
You will have to pay a penalty as one of the main effects of filing your ITR late. If you don’t submit your ITR by the deadline, Section 234F mandates that you pay upto Rs 5,000 late fee. If your yearly income is under 5 lakh, the late fees are only up to Rs 1,000.
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Direct tax receipts increased by 17.67%
The income tax department collected 16.61 lakh crore in taxes during the 2022–23 fiscal year, which was 17.67% more than the previous fiscal, according to CBDT chairperson. Direct tax collections, which include corporate tax and personal income tax among others, are also making notable “strides.”
Nitin Gupta stated that the fact that the tax collections exceeded both the budget and the revised expectations given by the government for revenue collections is a credit to the diligence of our cadre. “Our growth rate (for direct tax collection) over the previous year is currently 16 percent. We filed 7.78 crore income tax returns during the fiscal year 2022–2023, up 6.5 percent from the prior year, according to the CBDT director.
The government-set standards for “quicker processing of returns and the speedy issue of refunds” are being significantly worked on by the income tax department. During the previous fiscal year, more than 42% of ITRs were handled in a single day, according to Nitin Gupta, who also mentioned that the department had cut the ITR processing time to just 16 days.
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