4. ITR-4 (Sugam):

Eligibility criteria for ITR-4 are:
• Individuals, HUFs, and firms (other than LLP) who are residents and have a total income of up to Rs.50 lakh
• Owning a single house property (single ownership)
• Income from business and profession computed under Sections 44AD, 44ADA, or 44AE or interest income, family pension, etc.
• Having agricultural income up to Rs.5,000

5. ITR-5:
Firms, LLPs, AOPs (Association of Persons) and BOIs (Body of Individuals), Artificial Juridical Person (AJP), Estate of Deceased, Estate of Insolvent, Business Trust, Investment Fund, Co-operative society and Local authorities, all are all eligible to file ITR-5 as stated in Section 2(31)(vii). In a nutshell, persons excluding individuals, HUF, and companies i.e., partnership firms, LLPs, etc. can file ITR-5.

6. ITR-6:
All the companies can file ITR-6. Companies that are not permitted for an exemption under Section 11(income received from property owned for charitable or religious purposes) must furnish their income tax returns in ITR-6 format.

7. ITR-7:

Eligibility Criteria for filing ITR form 7:
• Trusts, political parties, charitable institutions, etc. claiming exempt income under the Income-tax Act can file ITR-7.
• Individuals and companies falling under Section 139(4A), Section 139 (4B), Section 139 (4C), or Section 139 4D, are required to file an ITR-7 form.

Taxpayers should tally the taxes deducted, collected, or paid by or on their behalf with the details filled in their Tax Credit Statement Form 26AS.
The ITR-7 form is divided into two parts comprising a total of 23 schedules. Part A comprises general information. Part-B comprises an outline of total income and tax computations about taxable income.
Starting from the financial year 2019-20 onwards, a taxpayer must also provide information on the registration or approval details.

• Tax filing exercise this year will be pivotal for each taxpayer as the taxpayers will have an option to choose a more beneficial tax regime.

Major Changes in the ITR Form:

1. Change in Taxability of Dividend Income:
The taxpayers need to report quarterly dividend income earned in FY 2020-21 to the tax authorities, to comply with advance tax provisions. The dividends have been taxable towards the assesses and the dividend income needs to be stated beneath the head “income from other sources”.
“Until AY21, only dividend income that was not exempt was required to be disclosed in the section “income from other sources”. Now, all types of dividend incomes are required to be disclosed here.

2. ITR – 1 cannot be filed in cases where tax has been deducted under Section 194N:
As per Section 194Nof the IT Act, tax is required to be deducted if the amount of cash withdrawn during the year exceeds Rs. 20 lakhs in case of certain non-filers of return for the past 3 years. These taxpayers whose cash withdrawal exceeds Rs.20 lakhs need to pay 2% TDS. For other cases, the cash withdrawal limit is at Rs. 1 crore.
Vide Income Tax (7th Amendment) Rule, 2021, Rule 12 of the Income-tax Rules has been amended. The amendments indicate a restriction of an assessee to use ITR Form 1, in cases where tax has been deducted under Section 194N.
It’s essential to note that the TDS deducted under Section 194N cannot be carried forward to any other assessment year. Hence, in case there is an excess tax deduction under this section, it must be claimed as a refund in the same deduction.

3. Computing Acquisition Cost under Section 112A and Section 115AD:
In the case of sale of Equity shares/Units of Equity Oriented Mutual Fund/Units of Business Trust, which were acquired before 31.01.2018, the cost of acquisition is computed after considering the Fair Market Value (FMV) as of 31.01.2018.
The ITR has been amended to allow the taxpayer to insert Sale Price, FMV, and Cost of Acquisition to calculate the capital gain effectively.

4. Disclosure of Marginal Relief in ITR:
Marginal relief surcharge is levied when the total income of the assessee exceeds the minimum prescribed limit, i.e., individuals or companies whose total income exceeds Rs. 50 lakhs or Rs. 1 crore respectively.
New ITR Forms requires the assessee to disclose the marginal relief figure separately for “Surcharge computed before marginal relief” and “Surcharge computed after marginal relief”. This will highlight the effect of marginal relief in the ITR form itself.

5. Cash Donation under Section 80GGA:
More disclosures of the date on which cash donation sunder Section 80GGA have been made would be required. Hence, the tax expert will have to accumulate the same from their clients.

6. Tax on ESOPs allotted by Eligible Start-up:
For taxpayers wherein the tax is deducted or payable under Section 80-IAC in respect of ESOPs (Employee Stock Ownership Plan), are not eligible to file tax returns in ITR-1 and ITR-4. They need to opt for another relevant ITR form.

7. Increase in the Threshold Limit for Tax Audit:

Section 44AB was amended by the Finance Act, 2020, and the threshold limit for a person carrying on business, was appraised from Rs. 1 crore to Rs. 5 crores.

8. Adjustment of Unabsorbed Depreciation if the Assessee has opted for Section 115BAC or 115BAD:
The new ITR forms have amended Schedule DPM (Depreciation on Plant and Machinery) to make a one-time adjustment on the written-down value (WDV) of the respective asset.
Further, Schedule UD [Unabsorbed Depreciation and allowance under Section 35(4)] has also been changed to make the necessary adjustment to the unabsorbed depreciation, for the amount of depreciation that is already adjusted with the WDV of the asset.

9. Nature of Security to be Furnished in Schedule 112A and Schedule 115AD:
As per Schedule 112A and Schedule 115AD, the assessee needs to furnish various details of the securities transferred, if the resultant capital gains are taxable under these sections. Example: number of shares or units transferred, cost of acquisition, fair market value, sale value, etc.
The ITR forms for the Assessment year 2021-2022 have inserted one new column in both the schedules, which questions the assessee to provide the nature of the securities transferred, i.e., shares or units.

10. Compute the Acquisition Cost for Section 112A and Section 115AD:
As mentioned before, Section 112A and 115AD require the assesse to submit the related information regarding the capital gains arising from the stated securities.
Amendments in the ITR forms indicate that the assesse needs to fill in the information regarding the sale price, FMV, and the cost of acquisition of the security and compute the gains accordingly.

11. Schedule 5A requires Assessee to Furnish Tax Audit Requirement of the Spouse under Section 44AB or Section 92E:
Schedule 5A governed by the Portuguese Civil Code requires the assessee to furnish information regarding apportionment of income between spouses. Varied details regarding the spouse are apprehended in the ITR, such as the Name and PAN of the spouse, income under various heads of income, etc.
To ensure that the relevant spouse has furnished return of income by the applicable due date, amendments have been made in ITR -3 seeking the due dates applicable in the case of the spouse.

12. Ceiling to Claim Deduction under Section 54EC specifically provided:
Section 54EC was incorporated in all forms except ITR-5. The amendments for the Assessment year 2021-22 have incorporated Section 54ECin the ITR-5 and states that deduction under section 54EC shall not exceed Rs. 50 lakhs.

13. Deletion of Schedule DI:
Before AY 2020-2021, taxpayers were permitted to avail deduction for the investments/deposits made during the extended period under Schedule DI.
The same has been removed from AY 2021-2022. Further, re-claim of deductions or exemptions made in AY 2020-2021 cannot be done.

14. Separate Disclosure of Interest Taxable under Section 115A read with Section 194LC:
Previously in ITR, a single disclosure was required in respect of the income which is taxable under Section 115A read with Section 194LC.
But since Section 194LC prescribes two different (4% and 5%), the ITR forms have been amended showing a separate disclosure in respect of the income taxable at the rate of 4% and 5%.

15. Increase in Safe Harbour Limit Prescribed under Section 50C:
Till AY 2020-2021, this provision was not pertinent if the value adopted for the payment of stamp duty was upto 105% of the consideration received.
The Finance Act, 2020, has amended and increased this limit from 105% to 110% from Assessment Year 2021-2022. Respective changes have been made in ITR-2, 3, 5, and 6.

16. Reference of Form 16D has been Inserted in Schedule of Tax Payments:
The ITR Forms for Assessment Year 2021-2022 have included a reference of Form 16D since ITR forms require details of tax deducted at source as per the certificate issued by the Deductor.

17. Undertakings Not Eligible for Deductions Removed from Schedule Section 80-IB:
Schedule 80-IB has been changed and certain rows permitting deduction have been removed for assessees who were claiming deductions under Section 80-IB. To know more about the changes in Schedule Section 80-IB, click here.

18. No Separate Reporting of Income from Life Insurance Business:
Schedule BP comprises separate reporting of income from the life insurance business. The AY 2021-2022 have removed such disparate reporting of income from the life insurance business in Schedule BP.

19. Nature of Business Code to be Mentioned if an Assessee is claiming deduction under Section 80P:
Schedule 80P of the ITR requires the assessee to furnish all the information relating to income and the amount of deduction.
ITR form for AY 2021-22 has inserted one more column in the Schedule 80P, which requires the assessee to submit the nature of the business code against the multiple types of income of such person.

Wrapping Up:
Filling ITR forms and tax filing is a tedious process for tax-payers. Every year there are new amendments in the ITR forms and the same needs to be taken care of. Ignorance in the same can cause a delay in filing of the income-tax return, which may result in penalty charges if paid after the due date.
Choksi Tax Services have qualified professionals having updated knowledge on taxes, and can help you in filing your Income Tax returns on time.

The recent budget speech made by our Union Finance Minister Nirmala Sitharaman unveiled some additions in pre-filled tax returns. The pre-filled tax return form for individual taxpayers was filled by linking the Aadhar card, PAN card, and bank accounts by the tax department which used to comprise salary details, tax payments, and tax deducted at source (TDS). To know how to download the pre-filled tax ITR form, click here.

As per the new rule, this form will now have other inclusions like capital gain details on listed securities, dividend income, interest income from banks and post offices, etc., and other tax deductions. The respective agencies will have to provide the details to the IT department.

Example: Dividend income details have to be provided by the company paying the dividend to the individuals, whereas interest income details have to be provided by the respective agencies, i.e., banks or NBFCs (non-banking financial institutions).

All this information will be gathered from relevant sources like banks, stock exchanges, mutual funds, etc. The details from Form 26AS, will be verified with PAN (Permanent Account Number), TDS return filed and previous year’s ITR.
Now the question is:

•  What is this information which is needed by the IT department?
•  What are its implications on taxpayers?

All the listed, as well as unlisted companies, need to submit tax-payer-wise details of accumulated dividends issued by the company during the year. All the banks (co-operative banks included), registered non-banking finance companies, post offices, etc. who accept deposits have to show the interest paid or credited to the taxpayer in case of interest exceeding Rs.5000 for the year.
Are you aware of what this interest amount of Rs.5000 includes? It includes the interest on the savings account, fixed deposit account, recurring deposits, all accumulated together.

Important:

• In the case of accounts having joint holders, the interest needs to be reported in the name of the primary holder.
• In the case of accounts in the name of a minor, the interest needs to be reported in the name of the guardian.

The Central Board of Direct Taxes (CBDT) has apprised specific persons that will give information on behalf of individual taxpayers in the pre-filled ITR forms. The main motto is the ease in the filing of returns since the taxpayers will just have to verify records of income arising from such investments without the need to source it individually before filling up the ITR form. Another reason is to motivate more persons to disclose their income and pay tax.

Procedure:
Depositories have to provide the particulars of capital positive aspects on a FIFO (first-in, first-out) basis on listed securities, taking the value of IPO or off-market transactions at zero, and value and sale value for on-market transactions at day-end charges.
Registrars and share switch brokers are required to report the details of capital positive aspects on mutual funds. All these are required to be reported on or before 31 May. This implicates that until mid-June, your pre-filled returns wouldn’t be out there on the tax division’s website, and you’ll not be ready to file your tax return.
This information will also be reflected in Form 26AS in your e-filing account.

How is Pre-Filled ITR returns a Headache for Taxpayers?

When respective entities give you a copy of the above-stated information, there may be a chance of wrong information being unknowingly passed to you. Apart from an unknown error from the provider’s end, there can be a mistake at the tax department’s end too in the process of information sharing.

Example:
A taxpayer who had filed his return in February was surprised to receive an email at the end of March stating that the bank interest information submitted by him was wrong. On comparing the details, it was noticed that the tax department had erroneously calculated the same bank interest twice.
When the issue was put up with the concerned personnel (tax head) at the bank and was questioned regarding the mistake, he clarified that apart from the TDS returns, one day all banks had received a notice from the IT department asking them to furnish information of depositors whose interest amount was exceeding Rs.5,000. Since this information was provided twice to the tax department; i.e., in the TDS returns, as well as in response to this notice, the tax department added both the amounts while comparing it with the tax return.

• This mismatch in the amount can lead to scrutiny of tax which is redundant harassment for none of your mistake.
• Apart from assembling information for their tax returns, the taxpayers will also have to reconcile the pre-filled information with their true figures. The same exercise needs to be done for TDS too.
• When the issue lies in capital gains on listed shares, there is a complete probability of a difference in the figures, the reason being the change in day-end rates. Even brokerage and other exchange charges may not have been considered in the pre-filled information, which may lead to a mismatch of figures. Rather than simplifying the tax return process, the reconciliation process will become more problematic and a waste of time and effort.
• In the case of capital positive aspects on listed securities, an erroneous figure in the acquisition deal or a sale closure charge while submitting returns proves to be a nightmare. Many times, error rectification is not as simple as it seems to be. In some cases, you need to plea the involved entity to rectify the same which can be time-consuming and tedious.
• You need to keep a track of the different concerned entities for such errors which is a headache. Errors that need to be rectified by such entities require a harmonious atmosphere and a willingness, which may be missing in the majority of the cases. Prompt rectification of errors identified by taxpayers is missing in some cases, which is a snag for taxpayers.
• In case of error not rectified before the due date, the taxpayer is at a loss, since there is no provision for extension of due date due to late submissions of tax returns caused by such delays. Hence precise submission of pre-filled tax returns is a must to prevent such situations.

Wrapping Up:
Mismatches in the tax return figures are a hassle to taxpayers. They need to accumulate information for their tax return, reconcile the pre-filled information with the accumulated information, get the errors rectified by concerned entities if any, and verify the TDS figures too. Hence pre-filled tax returns are double jeopardy because apart from giving ease in filing returns, they prove to be a headache in case of discrepancies.

• The assessing taxpayer is selected based on data analytics and artificial intelligence. This rules out the power in the hands of any human – so the chances of error are not there.
•  Elimination of territorial authority, i.e. though a taxpayer belongs to X city, assessment is done in Y city, due to random choice of computer.
•  Fully automated system and random allocation of cases.
•  No presence at the IT office required and no interference from IT officer on a physical basis. So no need for physical visits to IT office.
•  Notices are issued centrally with DNI (Document Identification No).
•  Draft assessment order, review of the order, and finalization procedure all are done in different cities and hence biased outcomes can be circumvented.
• Fair appeal orders help in minimizing litigation – which is a huge cost both for the assessee and the department.
•  Efficiency and transparency in the entire system successfully eradicates corruption and bribery.
•  Relief to honest taxpayers. Now the tax payer can complain against the IT officer without any repercussions.
•  This digital portal of tax payment can be used any time and any place, irrespective of boundaries.
•  Online acknowledgment receipts and transaction ids prove as evidence of tax submission.
•  Saves time and effort.
•  Cloud Storage and Go Paperless is the future of digitalization and hence India is one of the pioneers in faceless assessment scheme.

Disadvantages of Faceless Assessment:

• Inconvenience in uploading capacious documents.
• Lack of physical demonstration creates difficulty in the explanation process.
• Unexplained tax submissions can lead to wrong decisions and conclusions by tax officials.
• Technical glitches in the online portal may cause a delay in the submission process, leading to penalty charges.
• Restriction in file size (up to 5 MB) and restriction on the number of documents (up to 10 documents) to be submitted on the portal is a major drawback.

How Will Faceless Assessment Impact Business:
Since the Faceless Assessment Scheme has its own set of advantages and disadvantages, the impact of this electronic mode of tax payment is neutralin the business world.

• Since the human interface is excluded in the selection of cases which need to be scrutinized, it will extinct corruption, biased decisions and will give rise to fair judgment, creating a positive impact on business owners as well as their business.
• Taxpayers and assessing officer’s identity tend to remain a secret due to territorial distribution thus creating a positive business environment.
• Taxpayers who do not have the resources or properly equipped system to carry out the task may face a problem. Submission of documents on a technology-based platform, may create hardships for them since loads of documents need to be uploaded on the portal.
• The transition from physical to digital may trigger anxiety in the initial stage. Tax professionals also fret out about the complications that the large enterprises need to face, by uploading loads of documents. Since the upload count is limited, the situation becomes more complex.

Wrapping Up:
The transition from explaining one’s status to an assigned income tax officer physically can trigger agitation while dealing with a faceless system. But there will be a noticeable reduction in the delay in tax assessments and audits because the new assessment system flags unwanted actions.
“Transparent Taxation – Honouring the Honest” platform is indeed an honour to honest tax payers. This digital change helps remove the dark shades of tax officers and reduces the tax litigation burden on taxpayers.
Faceless Assessment Scheme has encouraged the taxpayers for voluntary tax compliance and it is an achievement by itself.

Benefits of Fixed Deposits:
Apart from the high-interest rate, few other beneficial factors are:

• Certainty of Fixed Return
•  Investment Security
•  Tax Benefits
•  Flexibility in Investment

But fixed deposits come with one single drawback, i.e., the interest which is received on fixed deposits is completely taxable and that’s what reduces the enticement of the same.
Being a fixed deposit investor, you should be aware of how the interest income is taxed, how tax benefits can be availed, and how the TDS on interest income can be waived.

About Deduction of TDS (Tax Deducted at Source):
Banks will automatically deduct TDS at the rate of 10% on the FD interest in case the income exceeds the exempted limit. In case the income is below the exempted limit, no TDS will be deducted.

To avert the bank from TDS deduction, the investor has to inform the bank about the interest income, confirm that it is lower than the exempt limit, submit a declaration Form 15G or Form 15H (as per the investor’s age) and submit their PAN (Permanent Account Number).
In case of failure by the investor to submit the PAN details, the bank will knock off 20% TDS. Hence, it’s wise to double-check with the bank whether they have your PAN details or not.

About Form 15G or Form 15H:
Form 15G or Form15H are self-declaration forms that are submitted by an individual to the bank. They are proof requesting the bank not to deduct TDS on the FD interest income since it lies below the exemption limit.
Investors aged above 60 years have to submit Form 15H, whereas investors below 60 years need to submit Form 15G to their bank.

Tax Deduction on FD Interest:
The interest income which is earned by fixed deposit is taxable under the heading “Income from Other Sources”. Few of the investors are unaware of the fact that though the amount which is invested in a tax saving fixed deposit is available as deduction under Section 80C of the Income Tax Act, the interest earned on the same cannot escape tax.

Tax-Exemption Criteria:
If the age of the individual is:

• Less than 60 years – income up toRs.2.5 lakh is the tax exemption limit
•  Between 60 – 80 years – income up to Rs.3 lakh is the tax exemption limit
•  Above 80 years – income up to Rs.5 lakh is the tax exemption limit

Your bank will consider your interest income received from all the fixed deposits on an annual basis.

• If the FD interest income amounts to Rs.40,000 or more(for investors below 60 years) or Rs.50,000 or more(for investors above 60 years), the bank will deduct the TDS at the rate of 10%.
• If their net income inclusive of the above-mentioned interest income falls below the minimum tax exemption slab, no TDS will be deducted for the same, provided they submit Form 15G and Form 15H respectively to their banks, along with their permanent account number.
•  The above-mentioned forms need to be submitted in the initial months of the financial year to avoid the mess of wrong tax deduction which follows with the refund process from the IT department.

Remember that these declarations are valid for a single financial year only, and hence the investor needs to submit these declaration forms every year for avoiding TDS deduction on the interest on fixed deposit interest.

How to Save TDS on Fixed Deposit:

1. By Submitting Form 15G / 15H:
To avoid TDS in the financial year 2021-2022, the investor needs to submit forms Form 15G or Form 15H (depending on their age and amount as mentioned above) in the initial months of the year 2021,to their banks where they have a fixed deposit.

2. Timing the Fixed Deposit:
You can select an optimum time for your fixed deposit, by gaining proper knowledge about the interest rate cycle. Ensure that the FD interest in the financial years is less than Rs.40,000 or Rs. 50,000 (in case of senior citizen).
Example: A yearly fixed deposit of Rs.10 lakhs at 6% can be initiated in September since the financial year ends on 31st March. This will split the interest in 2 financial years which can help avoid TDS.

Tax Benefits on Fixed Deposit Investment:
Investors are eligible to claim a deduction of up to Rs.1.50 lakhs in the financial year (as per Section 80C of the IT Act) on Tax saving FD investments. This investment amount will be deducted from the main income for getting the final taxable income.

Transfer of PPF account in case of Relocation:

If you are shifting to another location, the procedure to shift your PPF account is quite simple, hence you don’t need to worry. Just follow the below steps and the transfer process will be completed successfully.

• Don’t make the mistake of opening a new PPF account in a new bank branch, at the relocated place. Submit a transfer application to your current branch, and request them to transfer your PPF account to the bank branch in the new location.
• Ensure to keep your passbook updated before the transfer process. This helps in checking the last deposit amount as well as the last interest credited in your PPF account. In case of any pending interests, get the same rectified and processed, to avoid further transfer complications in the future.
• Once you submit your application, all the account and investment details are verified and on successful verification, the entire balance in your PPF account is transferred to the bank branch of your new location, as per your choice.
• Once the new bank branch gets your application, it commences the procedure for opening the PPF account.
• The procedure is quite similar to the opening of a bank account and here too, you need to submit all the essential documents and id proof like Aadhar card, etc. for KYC purpose.
• After the new account has opened, you can tally your PPF investment amount with your new passbook.

As per the Income-Tax laws, deadlines are set for taxpayers to file their Income-tax Returns (ITRs). A taxpayer is allowed to file the ITR on or before the deadline date, stated by the Income-tax department, and a majority of times, these deadlines are extended for the sake of taxpayers. Taxpayers should file and submit ITR’s on time, to avoid loss of benefits as well as payment of penalties.
But in many cases, taxpayers miss out on the deadlines as well as the extended dates and end up filing the return after the due date. ITR filed after the due date is also termed as “Belated Tax Return”.
Before moving to the briefing of belated tax return, and it’s consequences, let’s just have an overview of the deadlines stated by the Income-tax department for filing ITR.

In case you fail to submit your current ITR by 10th January 2021, you can still do so by 31st March 2021.

Deadline to File Belated Tax Return:
The deadline for filing the belated tax return starts after the last extended deadline date.
An example will clarify all your doubts regarding the same.
Example: Vivek is an individual taxpayer having a taxable income of Rs. 10,00,000 (AY 2020-2021). His ITR filing deadline is 10th January 2021, but he fails to file his return before the due date.
Vivek now has an option to file his belated return on or before 31st March 2021.
Though the taxpayers have the facility of filing belated tax returns, as well as revised returns, there are certain consequences which they need to be aware of before filing the tax return post due date.

Consequences of Filing Belated Tax Return:

1. Late Filing Fee:
Previously there were no penalty charges on the filing of belated tax returns. This led to many taxpayers filing returns after the extended deadline dates. So, to encourage timely tax payment, the Indian government made some modifications and the tax payer has to mandatorily pay the late filing fees if the income tax return is filed after the extended due date.
. This fee has to be paid on or before the date of filing the belated return.
• A maximum penalty of Rs. 10,000 applies to all taxpayers whose income in the financial year (2019-2020) exceeds Rs. 5 lakhs.
• If the total income of the taxpayer is less than Rs. 5 lakhs, then the maximum penalty amount to be paid is Rs. 1,000.

2. Limitation on carrying Forward of Losses:
Taxpayers can carried forward losses in the next year for set off in against income of subsequent years . But when a taxpayer is filing a belated return, these benefits become restricted.
There are a few losses that are not carried forward in the next year if the taxpayer does not file ITR within the specified deadline.

Losses under the head:
• Profits and Gains of Business & Profession (except unabsorbed depreciation)
• Income from Capital Gains
• Income from Other Sources
All the above losses cannot be carried forward in the next year. However, there is one exception, i.e., loss under the head “Income from House Property” can be carried forward in the next year, though belated tax return is filed.

3. Added Interest on Tax Liability:
Apart from paying the penalty charges of late filing of ITR, additional interest also needs to be paid as per Section 234(A) of the Income Tax Act. Unpaid outstanding taxes and unfiled returns can be a costly affair because an interest of 1% per month on the outstanding tax amount is charged.
Calculation of interest will commence from the applicable due date for filing return till the date when you file your belated return.
Example: Your outstanding tax amount is Rs. 2,00,000 and you are 8 months late for paying the taxes. Hence the additional interest amounts to:
Interest = 2,00,000 * 1% * 8 = Rs.16,000.
This amount of Rs.16,000 is to be paid in addition to your tax amount.
Note:  If your belated tax return file date lies in the middle of the month, then the entire month will be considered for calculation of interest.

4. Loss of Interest on Refund:
Many times, a taxpayer ends in paying more tax than the actual figure, resulting in a tax refund. Any tax refund which is due to the taxpayer is eligible for interest. When a taxpayer files the ITR within the specified time limit, he/she can avail interest on the tax refund amount. But in case of filing belated tax returns, they lose out on the interest eligible on the refund amount.
Note: As per Section 244A, interest will be calculated at the rate of 0.5% per month on the refund amount, from 1st April (assessment year) till the date of refund granted.

5. Failing to file ITR:
If a taxpayer fails to file ITR, notices are issued by the income tax department and the taxpayer has to pay income tax and interest liability till the date you ultimately file your ITR. Also the income tax department can levy a minimum penalty equal upto 50% of the tax which would have been avoided by you. The Government also has the powers to for prosecution in case the income tax return is not filed. ,
*All these penalties apply to the individuals who have taxable income. If your income is below the taxable limit, then you are saved from these penalties and fines.

Revised Return:
Any mistakes while filing the ITR form can be rectified and a revised form can be submitted. In both the cases, i.e., taxpayers who have filed ITR within the due date, or have filed belated tax returns, they have the right to file a revised return in case of mistakes. The revised return due date is the same date that is meant for filing a belated return.
Re-revised return in case of some error in the revised return can also be filed, provided you have enough documents to support the reason for varied revisions.

Wrapping Up:
Why go for extensions or penalties or face negative consequences when you can abide by the deadlines?
Filing ITR on time has ample benefits and it can be quickly done if your book of accounts is organized and accurate. You can also hire professional Chartered Accountants, which can help you to file your ITR correctly and on a timely basis.

In a Nutshell:

Employee embezzlement can be prevented by being alert and by keeping a check on the warning indicators. Early detection of the same helps in the prevention of thefts, which may beeither monetary, data related, inventory-based or any other theft damaging the business. Keep an eye on your employees and prevent your business from these malevolent insiders.

Time Limit to Maintain the Books of Accounts:

• For Professionals and Job Holders:

Books need to be maintained for 6 years from the end of the relevant financial year.

• For Companies:

Books need to be maintained at the registered office (or outsourced office as decided by the owners or directors of the company) for 8 years from the end of the relevant financial year, as per the Company Act.

Failure to Maintain Books of Accounts:

Penalties are levied in case an individual or a company fails to maintain the books of accounts as required as per Section44AA. A penalty charge of Rs.25,000 is levied as per Section271A if the taxpayer fails in maintaining proper book-keeping.

Note: In case of any unmentioned international transactions or lack of documents on the same, a penalty of 2% on each international transaction will be charged.

Final Thoughts:

There are ample benefits of bookkeeping. Apart from being compliant with the law, detailed recording of financial transactions (income or expenses) will not only help in better tax prediction but also help in better financial analysis and better relations with banks and investors.

Companies having their book-keeping in place can easily plan for future projects, based on the balance sheet figures and monetary resources.

For those who can’t handle book-keeping themselves, let me remind them that various Chartered Accountant firms offering accounting and book-keeping services at nominal rates.

Choksi Tax Services is one such Chartered Accountancy Firm which has an expert accounting team, which not only provides bookkeeping services but also helps in budget planning and tax planning.