What happens if ITR is not Filed?

If the income tax is not filed for the annual financial year, you will likely be pulled up by the government. Also, it is an illegal practice not to comply with these orders as it can backfire on you if you need to immigrate or secure a loan.

Hence all citizens should be aware that there is a penalty if ITR (Income Tax Return) is not filed.

This article will look at the various penalties, dates, and consequences of not paying the income tax. You can read on to find out the answer to “What if I don't pay income tax in India?”

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What are the Dates for Filing Income Tax for FY 2022-23 (AY 2023-24)?

The important dates for filing income tax for the Financial Year 2022-23 and Assessment Year 2023-24 is as follows:

Category of Taxpayer	Due Date for Tax Filing - FY 2022-23
Individual/Hindu Undivided Family/AOP/BOI (no auditing required)	31st July 2023
Businesses that require auditing	31st October 2023
Businesses that require Transfer Pricing Report	30th November 2023
Revised ITR	31st December 2023
Belated/late ITR	31st December 2023

There has been no extension to these dates as of April 20, 2023. The dates for FY 2023-24 are yet to be released.

What are the Dates for Filing Advance Tax Instalments for FY 2023-24?

Instead of paying the lump sum amount as income tax at the end of a financial year, taxpayers can choose to pay income in advance in the form of instalments, as you earn. This is called the Advance Tax.

The due dates for the payment of advance tax are provided by the Income Tax department, which are as follows:

Due Date or Advance Tax Filing FY 2023-24	Nature of compliance	Tax paid
15th June 2023	First instalment	15% of tax liability
15th September 2023	Second instalment	45% of tax liability
15th December 2023	Third Instalment	75% of tax liability
15th March 2024	Fourth instalment	100% of tax liability
15th March 2024	Presumptive scheme	100% of tax liability

What is the importance of filing ITR?

As a responsible and compliant citizen, one is required to file tax returns. The benefits and importance of filing ITR are enlisted below:

To avoid a penalty : The tax department levies heavy fines on individuals who do not file and pay their taxes under section 234F. Paying fines just for missing ITR deadlines feels quite a heavy price to pay for an average person.

To obtain a loan from a bank : When applying for a loan to purchase a house/car or medical treatment, the ITR for the previous three years is a must.

ITR details are vital : ITR documents are essential for proving your salary as they are more detailed than Form 16. They contain details of your income from salary and other sources. Additionally, ITR also acts as a proof of accumulated income a person earns throughout the years and through various sources.

To obtain VISA : Embassies of some foreign countries like the UK, US, Canada, and Australia ask for ITR receipts of the previous year to process VISAs. It helps to assure them that you are capable of taking care of yourself while you reside in those countries.

To make up losses faced in the next financial year : You cannot carry forward any losses to the next financial year unless you file an ITR. Thus, it is important to file the returns so that you can claim losses in subsequent years.

Claim tax refund : Income tax refunds are a common procedure and many people do this every year. Taxpayers who paid more than their tax liability become eligible to claim a refund.

Obtaining tax clearance certificates : For foreign or high-value transactions, mainly for the sales and transfer of certain assets, a person is required to provide a tax clearance certificate under Section 281 of the Act. One who files a regular ITR only can obtain the tax clearance certificate.

Eligible for government tenders : Income Tax Returns for the last few years are considered to be crucial if one intends to undertake any government projects by tender filing. Therefore, regular ITR makes one eligible for such important tenders.

How to Check if ITR is Filed or Not?

To check if you have filed the ITR for previous years, you need to follow the steps below on how to check if the ITR is filed or not.

Step 1: Visit the official ITR website.

Step 2: Login with PAN Number and Password’

Step 3: Select following path: E-file>Income Tax Return>View Filed Return.

Step 4: Above selection will show you all Income Tax Return filed in Income Tax Portal.

Consequences of Not Filing Income Tax

Here are the consequences of not filing ITR.

For salaried person

If an ITR is filed after 31st July of Assessment year, the late fee is ₹ 5,000. Additionally, for people having a total yearly income below ₹ 5 lakhs, the maximum penalty is up to ₹1,000.

For self-employed

The rule for self-employed people is the same as above. ₹10,000 is paid as a penalty in case of general late payment, and if you have filed the ITR after 31st August but before 31st December, you have to pay a fine of ₹5000. And, in the case your income does not exceed ₹5 lakhs, you need to pay ₹1000.

For companies

The rule for late payment of ITR is the same for companies as well. The penalty will be ₹10,000, but if the income is less than ₹5 lakhs, you need to pay a fine of ₹1000.

For senior citizens

Senior citizens will also need to pay a late fine of ₹10,000 if they fail to declare their ITR by the due date, and if their income is less than ₹5 lakhs, a fine of ₹1000 will be imposed.

Always check what happens if ITR is not filed if you fail to service the due amount within its deadline.

Are there Any Charges and Penalties if I Missed the Date?

It may be the case that if ITR is not filed within the due date, taxpayers can still file the returns later, after clearing the requisite fines. This filing is called belated returns; however, it is strongly not recommended to miss the ITR deadline of 31st July 2023 as you’ll have to face the following consequences:

Late Fee : You will have to pay a late fee of ₹5,000 under Section 234F in case you miss the ITR deadline of 31st July 2023. However, if your total income is less than ₹5 lakhs, the fine is reduced to ₹1,000

Imprisonment : If you have willfully failed to file the ITR for that stipulated financial year, the income tax officer can file charges against you, leading to imprisonment for a term of 3 months to 2 years, along with a fine. If you owe a large amount of tax to the income tax department, the imprisonment term may extend to 7 years

Extra Interest : Interest under Section 234A @ 1% per month or part month on the unpaid tax amount will be levied if you fail to file your return before the due date

Loss Adjustment : In case you have incurred losses from the stock market, mutual funds, or any of your businesses, then you can carry them forward and declare them with your next financial year’s income to significantly lower your tax liability.

However, in case you miss the ITR deadline, this facility is not available to you.

Belated Return : ITR filed after the stipulated due date is called the Belated Return. Under this, you will still have to pay the late fee and interest, as per the rates mentioned above, and also cannot carry forward the losses in the next financial year.

As per the Income Tax Department, the specified due date of filing the belated return is 31st December of the assessment year (unless extended by the government). For FY 2022-23, the deadline for belated return is 31st December 2023.

What if Income Tax is not Filed for Previous Years?

If ITR is not filed for previous years, then you can file it later online by applying for Condonation of Delay at the online portal of the IT Department. However, you can file ITR only for the two years preceding the current financial year. For example, if you want to file your ITR for FY 2021-22 and FY 2022-23, then you must do so by the end of FY 2023-24, i.e., by 31st March 2024.

However, you have to pay a fine of ₹5000 for missing the deadline of 31 July of current financial year. If you have a genuine reason for not filing and the Income Tax officer is satisfied with your explanation, you may not have to pay any fine.

Are there any charges and penalties?

For the assessment year 2023-24, the taxpayer is liable to pay ₹5000 if he/she declares ITR after the deadline but on or before 31st December.

In conclusion, if an income tax return is not filed, citizens and businesses are likely to pay a penalty. To avoid this, all individuals should speedily clear their income tax dues. Non-filing of income tax returns is a serious offence, and people should be aware of the indignity of the offence.

FAQs about Consequences of Not Filing ITR

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What happens if I don't pay income tax in India?

If a person does not file ITR and misses the ITR date, his returns will be filed late, and refunds, if any, will be processed late. Also, a late filing fee is applicable under Section 234F.

Can non-filing of ITR lead to imprisonment?

Non-filing of ITR can lead to imprisonment, where the term can vary between 3 months and 2 years, or up to 7 years in case of a higher tax liability.

Can I claim HRA exemption if I file ITR late?

Yes, you can claim House Rent Allowance (HRA) exemption even if your Income Tax Return (ITR) is filed late; your eligibility remains intact. To make things easier, consider using an HRA exemption calculator. It simplifies calculations, ensuring you file accurately and on time, which helps you steer clear of potential penalties.

Can I get a penalty for not filing itr if my income tax is taxable?

Yes, you will incur a penalty for not filing your ITR if your income is taxable. The income tax officer can initiate prosecution proceedings if you willfully fail to file a return even after receiving notices. Additionally, the officer may impose a penalty, and interest will be charged until the payment of taxes. However, you should always file your taxes on time, and if you need any help, you can use an income tax calculator to easily calculate your taxes.