Penalty on late filing of ITR and other tax changes effective from 1st April 2018

Taxpayers who do not file their income tax returns (ITRs) on time will have to shell out a penalty of up to Rs10,000, but from the 2018-19 Assessment Year (AY).

“In order to ensure that return is filed within due date, it is proposed to insert a new section 234F in the Act (I-T Act) to provide that a fee for delay in furnishing of return shall be levied for assessment year 2018-19 and onwards in a case where the return is not filed within the due dates specified for filing of return under sub-section (1) of section 139,” the memorandum for the Finance Bill 2017 said.

It specified two levels of penalty in this regard: “A fee of Rs5,000 shall be payable, if the return is furnished after the due date but on or before December 31 of the assessment year and a fee of Rs10,000 shall be payable in any other case.”
However, for small taxpayers or where the total income does not exceed Rs5 lakh, it is “proposed that the fee amount shall not exceed Rs1,000.” The memorandum said the decision was being taken “in view of the non-intrusive information-driven approach for improving tax compliance and effective utilisation of information in tax administration it is important that the returns are filed within the due dates.”

Further, it added that the “reduced time limits proposed for making of assessment” of I-T cases, as proposed in the latest Finance Bill, are also based on pre-requisite that returns are filed on time.”
“These amendments will take effect from April 1, 2018 and will accordingly apply in relation to assessment year 2018-19 and subsequent years,” it said

Finally due date for filing of income tax retunes(ITR) for Assessment year 2016-17 and 2017-18 is over. Now its time to get ready for AY 2018-19 ITR to avoid penalty of late filing of income tax return. Government has introduced new income tax forms for AY 2018-19. Rules are getting tough day by day or we can say that taxpayers must be active and punctual now to avoid any unnecessary penalties. So here in this article, our main objective is to save taxpayers from paying unnecessary penalties. Unnecessary means those penalties which we can avoid by proper follow up. A new section Sec 234F is inserted to levy penalty for late filing of ITR. Sec 234F is effective from Assessment Year 2018-19 (Financial Year 2017-18). If ITR for AY 2017-18 is filed after due date (31st July for individuals without audit, 30th Sept for other persons) but before 31st Dec of the Assessment year (31-12-2018) in case of Assessment year 2018-19) then Penalty of Rs.5000/- will be levied and If ITR is filed after 31st Dec then Res.10000 will be levied as penalty. Exception:- If the total Income of a person is below or equal to Rs. 5 Lakhs, then penalty will be restricted to Rs.1000 only.

Read more at: https://www.caclubindia.com/articles/penalty-for-delayed-filing-of-income-tax-return-for-ay-2018-19-32919.asp

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Know about Sahaj (ITR-1) – Income Tax Return filing

Recently, the Central Board of Direct Taxes (CBDT) notified the launch and use of new income tax return filing forms, named as Sahaj for the fiscal year of 2017-18. This is by far the easiest single page form to have ever been launched for IT return filing purposes. This form is aptly named as Sahaj (ITR 1), which has been introduced for individual assessees with an annual income for this financial year of about INR 50 Lakhs subject to certain conditions.

Who can file the ITR 1/ Sahaj?

The assessees allowed to file the ITR 1 are those who receive income from salaries or one residential property or some additional sources other than income from lottery or income from horse racing and such means.

Methods of filing ITR:

ITR 1 can be filled in one of following three ways:

1. One can do so electronically with a digital signature
2. Also electronically through a digital code
3. Or first doing so electronically and then submitting the ITR-V for verification of the Return Form

For the third option one must take two print outs of the Form ITR-V, one of which must be signed duly by the assessee; then mailed by post to the following address – Post Bag No. 1, Electronic City Office, Bengaluru 560 100, Karnataka.  The second copy may be retained by the assessee for their personal record keeping.

 How to file for returns in the physical form:

This is only allowed in a few special cases:

1. If the individual filing the return was above 80 years old in the previous year
2. If the income of the individual does not exceed INR 5 Lakh and no refund has been claimed.

In such cases, only one copy of the return form must be filed and if the return form is physically furnished, then the ITR-V or acknowledgement must also be duly filed for the same.

Mandatory information to be mentioned on the return:

1. Details of PAN
2. Email ID, mobile number
3. Residential address and status
4. Income and taxation details
5. Aadhaar number (if applied for Aadhaar but not yet received, then enrolment ID may be mentioned)

Note, effective from the 1^st of July, 2017 onwards Aadhar will be a mandatory field for Income Tax Return filing.

Important point to note about Sahaj:

It is important that you keep in mind that Sahaj is an annexure-less form, so do not attach any document with the form as it would be returned to the person filing the same.

You are not eligible to file ITR 1/ Sahaj if you have the following:

• Individuals whose total annual income exceeds INR 50 Lakhs
• Individuals with foreign assets
• Individuals with agricultural income of more than INR 5,000
• Those with taxable capital gains
• Individuals with income from business or profession
• Income from multiple residential (house) property

Main components of Sahaj:

• Part A: general information
• Part B: individual’s gross total income
• Part C: deductions and total taxable income
• Part D: computation of payable tax
• Part E: additional information
• Schedule IT: self assessed tax payments and details of advance taxes
• Scheduled TDS: necessary details of TDS/TCS

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