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ITR 2020: Have you not yet submitted your tax return? Here are the consequences that you can face

Individual taxpayers are obligated to file tax returns, before the due date, if their total gross income for the year, calculated in accordance with the provisions of the law, exceeds the basic exemption limit. There are certain categories of individual taxpayers for whom the provision of ITR is compulsory, regardless of whether their income exceeds the exemption threshold:

Non-residents and owners of foreign assets

Non-resident natural persons are subject to tax in India on income received, receivable, or generated in India. Therefore, a non-resident who has income from India and exceeds the basic exemption threshold (2.5 thousand, regardless of age) must file an ITR. Also, a resident person who owns any assets outside India, whether as an individual or a beneficial owner, must submit an ITR even if her total income is below the base exemption threshold.

Interestingly, the ITR offering is necessary to transfer losses incurred during the year and to offset them in subsequent years. Likewise, an individual whose income has been subjected to a tax deduction at source (TDS), but whose ultimate tax liability is less than the taxable threshold, must submit an income statement to claim a refund of the tax payable.

Implications for the 26AS model

The Income Tax Administration provides taxpayers with a return on Form 26AS that contains details of the various taxes deducted from the taxpayer's income. CBDT recently renewed the form to include additional details from high-value taxpayer transactions to information about pending/completed actions. All taxpayers must download Form 26AS from the Income Tax Portal and verify receipts that appear on Form 26AS. If the income reflected in the 26AS form exceeds the base exemption threshold, a tax return must be filed to avoid an audit evaluation.

Starting in the fiscal year 2020-21, taxpayers have been allowed to choose an alternative/simpler tax system, offering six panels at lower tax rates to taxpayers, if they waive a set of 70 available exemptions and deductions under income tax laws (including LTC, HRA, Standard Discount, Chapter VI-A opponent, etc.).

Under this new system, the basic exemption limit for all persons will be 2.5 thousand, regardless of age. Thus, ITR deposit will be mandatory for all people who choose to pay taxes under the new system and have a total income of more than 2.5 lakh.

Consequences of not presenting an ITR

While filing the ITRs has its benefits, failing to file can lead to penalties and prosecution. Hence, it is imperative for the person to check whether or not he is responsible for filing ITR.

Also Read: WhatsApp in 2020: Every new feature announced for the messaging service

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