As the new financial year unfolds it would soon be time for taxpayers to file their returns. If you are one of the nearly 4 crore taxpayers, you must ensure that you file your returns within the stipulated due date.
As the new financial year unfolds it would soon be time for taxpayers to file their returns. If you are one of the nearly 4 crore taxpayers, you must ensure that you file your returns within the stipulated due date. Got your Form 16? Start e-Filing Now!
Tax experts believe if you do not file your returns on time, you would not just be liable to pay the mandatory penalties, you could also find yourself having to answer to notices from the Income Tax Department, most of which would be system-generated, or your tax records might come up for scrutiny.
“The changes in the tax laws that are becoming applicable from the next financial year could lead to more scrutiny/notices from I-T department. The department is getting system-based instead of implementation being at discretion of an officer. Mandatory penalties and notice from the system for non-filers would help in catching casual defaulters.
Even compliance of notices is going online thereby avoiding the corruption opportunities, if any,” Sudhir Kaushik, Co-founder and CFO, Taxspanner told Moneycontrol.
As per Budget 2017 provision, a taxpayer delaying filing of tax returns beyond the July 31 due date, will have to pay a penalty of Rs 5000 if filed before December and Rs 10000 for filing after December and before March of the financial year.
“In case the delay is for more than a year then the process would become tedious for taxpayer, apart from the penalty which is now mandatory and not discretionary any more. Hence, those with taxable income before deduction under Section 80 C (Chapter VI of the I-T Act) above Rs 250000 should file their return before July 31 to avoid hassles. There are many people who have income above the basic exemption limit but do not file returns even after mandatory requirement — they need to be careful,” Kaushik said. Start e-Filing Now!
He said that this time around, the tax authorities also have access to a lot of data to pin down defaulters. “The number of notices has already increased due to various mismatch in data and defaults like non-filing. It would further increase on the basis of data being collected from various sources like cash deposited in bank over certain limit. The department is getting enough data or would make an effort to get the same to make an estimate of income of a person based on the assets you own, expenses you made, and lifestyle being enjoyed,” Kaushik said.
Archit Gupta, CEO, Cleartax.com also feels delayed filing will come under greater vigil of the taxman. “Imposition of penalties for delayed filing of returns does mean more scrutiny. With the changes announced in the Budget, the government has taken a firm stance towards wider compliance,” Gupta said.
He, however, said that the tax department is unlikely to be too harsh towards taxpayers. “Finance Minister Arun Jaitley has assured that there will be no scrutiny for first-time return filers with income less than Rs 5 lakh. A simple one-page form has also been proposed.
The tax department is trying to adopt a soft but firm approach. However, tax compliance is likely to go up from 2017-18. More people will now file on time, within the due date to avoid penalties,” Gupta told Moneycontrol.
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(As Published in Money Control on April 3, 2017)