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Consequences of Not Filing the Return of Income within the Due Date or for Not Furnishing the Return of Income

1. Interest for default in furnishing return of income under section 139(1) or (4) or in response to a notice under section 142(1) [Section 234A (1)]:

The assessee is liable to pay interest in the following cases:

(a)        where the return of income is furnished after the due date specified under section 139(1); or

(b)        where the return of income is not furnished by the assessee.

Rate of Interest:  

Simple interest calculated @ 1% p.m. or part of the month.

Period for which Interest is parable:

The interest will be payable for the period commencing on the date immediately following the due date and would end on:

-           in case of (a) above, the date of furnishing the return of income; or

-           in case of (b) above, date of completion of assessment under section 144 (Best Judgement Assessment).

Amount on which interest is parable:

Interest is payable on the amount calculated as under:

Tax determined under section 143(1) or on regular assessment under sections 143(3)1144/14711 53A

 

-

Less: (i) Advance tax, if any paid

-

 

(ii)  Tax deducted / collected at source

-

 

(iii)  Any relief of tax allowed under section 89 (Inserted by the Finance (No. 2) Act, 2019, w.e.f. 1.7.2007.

 

 

(iv)  Any relief / deduction of tax allowed under sections 90, 90A and 91

-

 

(v)  Any tax credit allowed to be set off in accordance with the provisions of section 115JAA (MAT credit) or section 115JD (AMT credit)

-

-

Amount on which Interest is payable

 

[ - ]

2. Fee for delayed filing of return of income

In order to ensure that return is filed within due date, the Act has inserted the following new section 234F:

Fee for default in furnishing return of income. [Section 234F]

Amount of fee payable for late filing of return of income [Section 234F (1)]:

Without prejudice to the provisions of this Act, where a person required to furnish a return of income under section 139, fails to do so within the time prescribed in section 139(1), he shall pay, by way of fee, a sum of,—

(a)        Rs. 5,000, if the return is furnished on or before the 31st day of December of the assessment year;

(b)        Rs. 10,000 in any other case:

However, the total income of the person does not exceed Rs. 5,00,000, the fee payable under this section shall not exceed Rs. 1,000.

Provision applicable for return furnished for assessment year 2018-19 and onwards [Section 234F (2)]:

The provisions of this section shall apply in respect of return of income required to be furnished for the assessment year commencing on or after the 1st day of April, 2018.

Prosecution:

Willful failure to furnish return of income may also attract prosecution under section 276CC.

 

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