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  • Category: Miscellaneous

    What if I don't file an IT return for the year?

    Members,
    Presume I am a government servant and drawing salary through the bank. The bank deducts the tax due and submits it to the government regularly without fail. I get a Form 16 a & b quoting the details of the total salary drawn and tax deducted at source(TDS). I owe nothing to the government and government owes nothing to me. In such cases, what happens if I don't file an IT return by 31st July?

    Can the IT experts post their views, comments and opinion on this subject?
  • #572740
    In the Government organizations generally, income tax on salaries is deducted by the employer i.e. the head of the office instead of depending upon the banks to deduct income tax and TDS certificate is issued at the end of the year. As far as salary income in concerned, the employers are made totally responsible for the same.
    The employers are required to obtain TAN number or 'Tax Deduction and Collection Account Number' and file quarterly return to the income tax department.
    Such deductions are reflected in the form 26AS of the employee.
    There are provisions of penalty for employers in cases of failures to deduct income tax at source. The tax liability of the employee is determined at the beginning of the year after taking into account the total salary likely to be paid, deductions, exemptions, and reliefs if any and on the basis of the applicable rates for the financial year concerned. Every month, 1/12 of this net tax liability is required to be deducted by the employer.
    However filing income tax return is the individual responsibility of the Government employee as there may be other sources of income like rental income from property, accrued interest etc.

    Let us encourage each other in sharing knowledge.

  • #572741
    Form No. 16 simply indicates the details of salary earned from the working place and the tax deducted on that salary. A person can have additional income (like rental income, income from writing, and various other sources). Office doesn't have any information on these income. So, a person is required to pay advanced tax on his own in respect of these additional income. The Income Tax return reflects the consolidated income and tax paid thereon.
    So, a person is required to file Income Tax return taking into account all types of income including interest income. If he/she doesn't file the return, he may receive notice from the I. Tax department and he/she may have to pay penal interest on tax.

    “Whenever I feel the need to exercise, I lie down until it goes away.” - Paul Terry

  • #572742

    “Whenever I feel the need to exercise, I lie down until it goes away.” - Paul Terry

  • #572743
    Kailash and Partha,
    My question is - When I do not have any other income other than the salary for which my employers deducts the tax and pay it to the government in time, what will be the consequences I need to face if I do not file the IT return, this year or in the following years for many years?

    No life without Sun ¤

  • #572751
    Filing income tax return is a mandatory requirement on the part of all individuals who have taxable action. Failure to file income tax return before the due date, attracts penal provisions like late fee and penalty.
    A belated return can be filed within one year. However a penalty of Rs. 5000 can be levied in such cases, but it is up to the discretion of the assessing officer.
    In extreme cases, where the tax payer willfully delays submission of income tax return, imprisonment of a term between 3 months to 2 years can be imposed in cases where the income tax is less that Rs. 25 lakh, under section 276CC of the Income Tax Act. However in case the tax amount exceeds Rs. 25 lakh then the term of imprisonment may be between 6 months to 7 years.

    Let us encourage each other in sharing knowledge.

  • #572752
    Dear Kailash,
    Please understand that I am a government employee and all my due taxes have been paid by my employer in time. I have no owing due to government or from the government. However, I could not file a Tax return. My total annual salary is less than 5 lakhs. I do not want to file a tax return. What will be the consequence?

    No life without Sun ¤

  • #572753
    Mr. Sun: By filing income tax return, you are certifying that you have no other income. If you don't file the return, there is an area of doubt.
    “Whenever I feel the need to exercise, I lie down until it goes away.” - Paul Terry

  • #572755
    The points earned by me by virtue of my earlier response (#572741) are not being reflected in my score-board.

    Coming back to the subject of this thread, filing income tax return has many other benefits while taking loans from banks and other financial institutions. The copy of the return (ITR_V) is also necessary for various other purposes.

    “Whenever I feel the need to exercise, I lie down until it goes away.” - Paul Terry

  • #572757
    The penal provisions have already been explained. Now generally providence takes over the law in such cases. In case your case happen to come within the random sample scrutiny then, a notice may be issued to you for an explanation. Since taxes are already paid, only the penalty for not filing income tax can perhaps be imposed. However, it is always advisable to be on the right side of the law.
    Let us encourage each other in sharing knowledge.

  • #572763
    Partha,
    I got a valid point from you - " Filing income tax return has many other benefits while taking loans from banks and other financial institutions. The copy of the return (ITR_V) is also necessary for various other purposes."

    No life without Sun ¤

  • #572767
    Kailash,
    Do they really impose some penalty for not having rendered IT return, to a government employee who regularly pays his tax dues through his employer? Have you seen any such individual who has been penalized for not rendering an IT return?

    No life without Sun ¤

  • #572792
    As I explained in my response #572757, providence takes over i.e. it depends on luck/fate. As far as I can guess, the IT people are not able to scrutinise each and every case. They may be more interested in catching bigger fishes than the poor Government employees. However, perhaps they carry out detailed scrutiny of few cases of all types on a random sampling basis.
    I know a case in which a Government employee had received a notice though for a different reason. His employer had failed to file the mandatory quarterly return of the TDS, though the due tax was deducted from his salary. After 3-4 years, he received a notice to pay the tax together with interest and penalty etc.
    Delayed IT returns can be submitted in respect of previous years also in case taxes are fully paid, to keep the record clean.

    Let us encourage each other in sharing knowledge.


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