File ITR on time, else get ready to pay penalty upto 10k

Taxpayers who do not file their income tax returns (ITRs) on time will have to shell out a penalty of upto Rs 10,000.

The memorandum for the Finance Bill 2017 has chalked out a new section-234F in the I-T Act, according to which, in order to ensure return filing within due date, a fee for delay in furnishing of return shall be levied under sub-section (1) of section 139.

The new section specifies two levels of penalty in this regard: 1) A fee of Rs 5,000 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 Rs 10,000 shall be payable in any other case. 2) However, for small taxpayers or where the total income does not exceed Rs 5 lakh, it is "proposed that the fee amount shall not exceed one thousand rupees." 

The memorandum also said that 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 so 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.