The deadline for filing income tax returns (ITR) has come and millions have already submitted their tax returns for the current assessment year. It is important to know how refunds are processed, what penalties will be imposed for the delayed payment of advance taxes and filing tips.
This guide tells taxpayers about ITRs, refund timelines for ITRs, penalties for delayed payments and the latest updates in the filing to keep them updated.
What is ITR?
Income Tax Return (ITR) is a formal document through which taxpayers communicate to the Income Tax Department regarding their income, deductions and taxes paid during an assessment year. Filing an ITR is mandatory for individuals, HUFs, multinational companies, Indian companies and firms with income above the statutory limit.
They assist the government in tracking income taxation and enforcing tax compliance and allow the taxpayer to get a refund of excess tax paid and to maintain good books of records.
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How long it takes to get the ITR Refund?
Once the Income Tax Return is filed an ITR refund is usually sanctioned in a matter of days owing to the simplicity of the filing and against any objection. The smaller refund amounts have been reported by taxpayers to be reimbursed within four weeks. In cases having complex components such as capital gains or business income, it would take longer time due to the check-up that has to be done.
Very little amounts of refunds below Rs. 15,000 could actually be set right on the same day. An amount of interest at 6% per annum on refunds delayed beyond the stipulated time also begins from April 1 being paid by the Income Tax Department to the taxpayer.
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What Is the Penalty for Not Paying Tax?
The advance tax payment is wisely to avoid penalty and the final date for making advance tax payment is September 15. If a taxpayer pays anything lower than 45% of the tax amount by this date, then a penalty will be applicable under Section 234C of the Income Tax Act for payment of interest at 1% for each of the three months thereafter on the shortfall in payment.
The next instalment of advanced tax becomes due to be paid in December whereby on failure to pay on or before March 31 to the extent of 90% of the advance tax liability would lead to another penalty under Section 234B at an additional 1% interest payable until ITR is filed and the dues are settled.
Present Status of E-filing and Issues with the Portal
As per the data already made public over 6.69 crore returns were filed and out of them only about 6.03 crore were verified. Meanwhile, quite a number of taxpayers had problems with the sluggishness of the e-filing portal. There had been rumors regarding the filing deadlines being extended, but the Income Tax Department has ensured that no extension is being granted this year. Taxpayers are advised to file on time to avoid penalties and to anticipate refunds.
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