Income tax return: Taxpayers have to count penalty for failure

Staff Reporter :
The individual taxpayers will have to count double penalty for failure to submit their income returns within the deadline, according to a circular issued by the National Board of Revenue (NBR).

The taxpayers will also deprived of tax exemption or rebate facility for delay in tax return filling, the circular said.

Normally, individual taxpayers are bound to file their income tax returns of related tax year from the day of July 1 to November 30.

They were also able to submit return before the stipulated period by seeking time or by paying a penalty for the delay and interest on the payable amount.

But as per new the new tax law, the NBR has increased the amount of penalty for the delay in filling returns and withdrawn tax exemption and rebates on eligible investment for missing the deadline.

The circular also said that the individual taxpayers will get up to 15 per cent tax deduction on eligible investments if they file their income tax returns within the deadline.

But, failure to file tax return by National Income Tax Day (November 30), the exempted amount must be added before calculating the actual tax liability.

Earlier, individual taxpayers would get a 7.5 per cent tax rebate on eligible investment, if they filed their income tax returns before the deadline.

According to the circular, the investment in savings bonds, provident funds, welfare funds, life insurance, stock market and other sectors are permissible investments for the taxpayer.

Besides, if a taxpayer fails to file income tax return on time, the individual will have to pay an additional 4 per cent interest on the tax return every month for up to 24 months, the circular read.

The Taxpayer Identification Number (TIN) holders, who have no taxable income, have to be filed their tax returns within stipulated time, the circular said.

The NBR extended time twice for return submission in the fiscal year 2022-23, as the number of returns remained around 30 lakh out of around 82 lakh TIN holders.

As per Income Tax Guidelines 2022-23, proof of return filing has been made mandatory for 40 types of services.

Due to this e-TIN holders have no option to file returns.

If not, people will have to face various complications to get different services.