The Income Tax Act is a comprehensive legislation that governs the taxation of income in India. One of the most important provisions of the Act is Section 139, which deals with the filing of income tax returns. Section 139(4c) is a sub-section of this provision that deals specifically with the implications of late filing of income tax returns. In this article, we will explore the key features of Section 139(4c) and its implications for taxpayers.
What is Section 139(4c)?
Section 139(4c) of the Income Tax Act states that if an individual or a company fails to file their income tax return by the due date, they may still file a belated return at any time before the expiry of one year from the end of the relevant assessment year or completion of the assessment, whichever is earlier. However, if the belated return is filed after the expiry of this period, the taxpayer may be liable to pay a penalty.
Implications of Late Filing
The late filing of income tax returns can have several implications for taxpayers. Some of these implications are:
a. Penalty: If a taxpayer files a belated return after the expiry of the period mentioned in Section 139(4c), they may be liable to pay a penalty of Rs. 5,000. However, if the return is filed after December 31st of the assessment year, the penalty amount may increase to Rs. 10,000.
b. Interest: If a taxpayer has any tax liability, interest may be charged on the outstanding amount at the rate of 1% per month or part thereof until the date of payment.
c. Loss of Deductions: If a taxpayer fails to file their return within the due date, they may lose the opportunity to claim certain deductions and exemptions.
Exceptions to Penalty
There are certain exceptions to the penalty for late filing of income tax returns. These exceptions are:
a. If the total income of the taxpayer does not exceed Rs. 5 lacks, the penalty for late filing will be limited to Rs. 1,000.
b. If the taxpayer can show that the delay in filing the return was due to reasonable cause, such as illness or natural calamity, the penalty may be waived.
c. If the taxpayer is a company with a total income of less than Rs. 50 lakhs, the penalty for late filing will be limited to Rs. 1,000.
Consequences of Non-Filing
Non-filing of income tax returns can have serious consequences for taxpayers. Some of these consequences are:
a. Prosecution: If a taxpayer does not file their income tax return, they may be prosecuted under Section 276CC of the Income Tax Act. This can result in imprisonment of up to seven years and a fine.
b. Loss of Refunds: If a taxpayer is eligible for a refund of excess tax paid, but does not file their return, they may lose the opportunity to claim the refund.
c. Disqualification: If a taxpayer does not file their return, they may be disqualified from holding certain positions, such as that of a director in a company.
Conclusion
Section 139(4c) of the Income Tax Act is an important provision that deals with the implications of late filing of income tax returns. Taxpayers who fail to file their returns within the due date may be liable to pay a penalty and may lose the opportunity to claim certain deductions and exemptions. However, there are exceptions to the penalty, and taxpayers who can show reasonable cause for the delay in filing may be able to get the penalty waived. Non-filing of income tax returns can have serious consequences, including prosecution and loss of refunds. Therefore, taxpayers need to file their returns on time and comply with the provisions of the Income Tax Act.
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Frequently Asked Questions (FAQs) on Section 139(4c) of the Income Tax Act
- What is the due date for filing income tax returns?
The due date for filing income tax returns is July 31st of the assessment year for individual taxpayers and September 30th of the assessment year for taxpayers who are required to get their accounts audited.
- What is a belated return?
A belated return is a return filed after the due date mentioned in Section 139(1) of the Income Tax Act. Taxpayers can file a belated return within the period mentioned in Section 139(4c) of the Act.
- What is the penalty for late filing of income tax returns?
If a taxpayer files a belated return after the expiry of the period mentioned in Section 139(4c), they may be liable to pay a penalty of Rs. 5,000. However, if the return is filed after December 31st of the assessment year, the penalty amount may increase to Rs. 10,000.
- Are there any exceptions to the penalty for late filing?
Yes, there are exceptions to the penalty for late filing. If the total income of the taxpayer does not exceed Rs. 5 lacks, the penalty for late filing will be limited to Rs. 1,000. If the taxpayer can show that the delay in filing the return was due to reasonable cause, such as illness or natural calamity, the penalty may be waived. If the taxpayer is a company with a total income of less than Rs. 50 lakhs, the penalty for late filing will be limited to Rs. 1,000.
- Can a taxpayer claim deductions and exemptions if they file a belated return?
If a taxpayer files a belated return, they may lose the opportunity to claim certain deductions and exemptions. Therefore, it is important to file income tax returns on time.
- What are the consequences of non-filing of income tax returns?
Non-filing of income tax returns can have serious consequences, including prosecution under Section 276CC of the Income Tax Act, imprisonment of up to seven years, and a fine. Taxpayers may also lose the opportunity to claim refunds of excess tax paid and may be disqualified from holding certain positions, such as that of a director in a company.
- Is it possible to revise a belated return?
No, it is not possible to revise a belated return. Therefore, taxpayers must ensure that they provide accurate information in their belated returns.
- What is the period within which a taxpayer can file a belated return?
Taxpayers can file a belated return at any time before the expiry of one year from the end of the relevant assessment year or completion of the assessment, whichever is earlier.
- What are the documents required for filing income tax returns?
Taxpayers need to provide their PAN card number, Form 16/16A, TDS certificates, and details of their income and investments while filing income tax returns. They may also need to provide additional documents if required by the Income Tax Department.
- Can taxpayers file income tax returns online?
Yes, taxpayers can file income tax returns online using the e-filing portal of the Income Tax Department. They can also seek the help of tax professionals or use tax filing software to file their returns.
