Penalty!!!

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praveen (Querist)
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15 March 2011 A person has forgot to file the returns for the Assessment year 2008-09. Now has received a letter from the Income Tax Department asking to furnish the returns. He has quite a bit of income around 8 Lakhs but quite a bit of TDS as well to his credit. He is a professional and has some expenses which will bring down the income considerably. If he has to pay around Rs.20000 tax with interest now is there is any penalty which could be laid upon.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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15 March 2011 Failure to furnish return of income before the end of the relevant assessment year attracts penalty u/s 271F of the Income tax Act,1961.

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praveen

praveen (Querist)
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18 March 2011 could you also tell me how much it would be

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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09 August 2024 In India, under the Income Tax Act, 1961, if you have missed filing your return for a past assessment year, you may be subject to penalties and interest in addition to the tax payable. Given the situation where a return for the assessment year 2008-09 has not been filed, here’s a breakdown of potential penalties and interest that could apply:

### **1. **Interest for Late Payment of Tax**

- **Section 234A**: Interest is charged under this section for the delay in filing the return. The interest rate is 1% per month or part of a month from the due date of filing the return until the date of actual filing.

### **2. **Penalty for Late Filing of Return**

- **Section 271F**: A penalty of ₹5,000 may be levied for failing to file a return of income before the due date.

### **3. **Additional Penalties**

- **Section 271(1)(c)**: If the delay in filing is due to concealment of income or inaccurate particulars, further penalties can be imposed under this section. This is subject to the discretion of the assessing officer and can range up to 100% or 300% of the tax evaded.

### **Calculating the Penalty and Interest**

- **Penalty under Section 271F**: Fixed penalty of ₹5,000 if the return is filed after the due date.

- **Interest under Section 234A**: Calculated as 1% of the tax due per month from the due date of filing until the date of actual filing. For a tax payable of ₹20,000, the interest would be 1% of ₹20,000 for each month of delay.

Since the assessment year in question is 2008-09, the delay is significant. Here’s a simplified example to illustrate how the penalty and interest would be calculated:

**Assuming**:
- Tax payable: ₹20,000
- Delay: 15 years (180 months) approximately

**Interest Calculation**:
- Monthly interest = 1% of ₹20K = ₹200
- Total interest = ₹200 × 180 months = ₹36K

**Total Penalty**:
- Penalty under Section 271F: ₹5K
- Interest: ₹36K

**Total Amount Payable**:
- Tax + Interest + Penalty = ₹20K + ₹36K + ₹5K = ₹61K

### **What to Do**

- **File the Return**: It is important to file the return as soon as possible to mitigate further interest accrual.
- **Consult a Tax Professional**: Given the long delay and the complexity of the situation, it is advisable to consult a tax professional or chartered accountant for precise calculations and to address any additional concerns with the Income Tax Department.

Bear in mind that the exact penalties and interest may vary depending on specific circumstances, including any discretion exercised by the tax authorities.