If you fail to file your income tax return by the due date, you may be liable to pay late filing fees. For the financial year 2022-23, the late filing fee can be up to Rs 10,000, depending on the duration of the delay. Moreover, if you fail to disclose your actual income or provide inaccurate information in your tax return, you may be subject to penalties ranging from 50% to 200% of the tax amount evaded.
Interest on Outstanding Taxes
In addition to penalties, if you have a tax liability but fail to file taxes, you may be liable to pay interest on the outstanding tax amount. The interest is calculated based on the number of days of delay in filing and the applicable interest rate.
Scrutiny and Investigation by Tax Authorities
Non-filing or delayed filing of taxes can trigger scrutiny or investigation by the income tax department. Tax authorities have the power to initiate inquiries, audits, and assessments to ensure compliance. This may lead to additional scrutiny of your financial records and potential penalties if discrepancies are found.
Ineligibility for Certain Benefits and Financial Services
Failure to file taxes can have implications beyond penalties and legal consequences.
- Financial institutions often require income tax return filings as proof of income for loan applications. Non-filing or irregular filing may affect your chances of securing loans.
- Some countries require income tax returns as supporting documentation for visa applications. Incomplete or non-existent tax filings can raise questions during the visa process.
- Non-filing of taxes may affect your eligibility for certain government schemes, subsidies, or welfare benefits that consider income tax returns for assessment.
It's crucial to meet your tax filing obligations to avoid the potential consequences of non-compliance. Hence prioritize tax compliance, seek professional guidance if needed, and file your income tax returns accurately and on time to ensure a smooth financial journey.
Look up more articles here for a smooth first time tax-filing process. All the best!
