ITR Filing: According to the Income Tax Law, tax returns should be filed by all those people who have done some transaction. On the other hand, if the gross total income is above the basic exemption limit for the financial year 2022-23 (AY 2023-24), then it is mandatory to file ITR. On the other hand, if the taxable income of a person does not exceed Rs 5 lakh, then exemption is allowed under section 87A of the Income Tax Act.
For the financial year 2022-23, if the taxable income of any person is not more than Rs 5 lakh, then it was in the old tax regime and in the new tax regime Income tax return can be filled by choosing the option of; Under Section 87A, a rebate of up to Rs 12,500 is available. To claim such exemption under section 87A, it is mandatory for the taxpayer to file his ITR.
If you have not yet filed Income Tax return, then file it before 31st July, otherwise you will be allowed to file return with penalty. Here it is explained with example why it is mandatory to file ITR. If the net taxable income of a person is Rs 4.25 lakh. Income is less than the taxable income of Rs.5 lakhs, hence Nil tax will be payable. However, the income of Rs 4.25 lakh is above the basic exemption limit of Rs 2.5 lakh. Hence, it is mandatory to file Income Taxreturn.
What happens if ITR is not filed
If your ITR filing is mandatory and you have still missed the ITR filing deadline, you can still file your tax return. The return filed after the deadline will be called Vlated ITR. However, if you file belated ITR, you will be liable to pay penalty and miss out on other benefits.
Amount of fine
The deadline is currently July 31, 2023. If ITR is filed then a penalty of Rs 5,000 will have to be paid. However, if your taxable income is less than Rs 5 lakh, the penalty amount will not exceed Rs 1,000. For taxable income of less than Rs.5 lakh, there is no tax liability due to tax exemption under section 87A. However for income level above Rs 5 lakh, if you have tax liability and have not filed ITR, penal interest will be levied under section 234A.
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