Know The Consequences of Non-Filing of Income Tax Returns

Published On: Jul 6, 2018Last Updated: Oct 14, 20235.3 min read

Income tax return is a form that is used to intimate the department to record the total and taxable income during the financial year. Filing of Income Tax return is mandatory for every person and business whose taxable income exceeds the basic exemption limit, i.e. Rs 250,000 for normal taxpayer for P.Y. 2017-18.

Although it being mandatory and necessary for the businesses and other individuals, many miss out to file the income tax return before the due dates prescribed. The failure to file before concerned due date leads to face many consequences by the assessee. First, know what the due date for Income Tax Return filing is:

The income tax return is filed for the whole financial year ending on 31st March of every year. The return for F.Y. 2017-18 is filed in the assessment year (A.Y.) i.e. next Financial Year, 2018-19. Here are the due dates for filing ITR.

Up to 31st July of next year

(For F.Y. April, 2017 – March 2018, the due date would be 31st July, 2018)

Individuals, LLP, HUF, BOI and AOP

(That does not fall under the audit provisions)

Up to 30th September of next year

(For F.Y. April, 2017 – March, 2018, the due date would be 30th September, 2018)

Companies including other entities on which Audit provisions are applicable

“What if I fail to file ITR on time?”

This is the most common question we confront while assisting businesses. Most of the businesses fail to know the importance of filing ITR. For businesses, the filing of ITR is mandatory irrespective of their status of business or number of transactions and turnover. Not only for businesses but also the households must file ITR if they have income from any source. Also, for salaried individuals filing ITR is necessary as it comes with many benefits to the assessee. Without weighing to the mandate and the benefits, if you still escape from liability of ITR filing, here are the consequences listed:

  1. Pay penalty & interest:

Have taxable income, but didn’t file the ITR? Yes, you may be charged with penalties. The income tax department may charge you with penalty amounting INR 5,000 if you have not filed ITR timely. This penalty may also increase to INR 10,000 if you do not file ITR even after 31st December of the concerned assessment year. However, the amount of relief is, if your income does not exceed INR 5 Lakh, the amount of penalty is limited to INR 1,000 only. Apart from the penalty, the assessee is also liable to pay interest at 1%, if you have any taxable liability for the respective year.

  1. Face Income Tax scrutiny:

You have been filing the returns since few years but didn’t file this year; you may be under radar of the income tax department for scrutiny. Hence, even if your income falls under basic exemption limit, you might be under the list of scrutiny from Income Tax.

This becomes severe if you have not filed a return and paid tax although having taxable income. If you have concealed the income, you may be charged with 100% to 300% of the tax evaded.

  1. You cannot revise the ITR:

It may happen that while computation of income or while filing the ITR, a particular amount or income is wrongly mentioned. Yes, a clerical error may happen and the department also allows you to revise the return owing to such errors, but subject to its timely filing. Thus, if you haven’t filed the ITR on time and file the belated return, you are not allowed to revise the return, whatever the mistake is.

  1. No carry forward of losses:

Along with information of incomes, the assessee also intimates about the losses obtained in the concerned financial year. With intimation of losses through ITR on time, the department allows to carry forward the losses up to certain years. To carry forward loss means it will be set-off against the future taxable income resulting to reduce the liability to pay tax. If you do not file the ITR within dates prescribed, you miss out on the chance to carry forward the losses and take the benefit. From capital gain to business loss, you are not eligible to carry forward such losses once you fail to file the return before due dates.

  1. Delayed or no refund:

If the assessee has paid the tax more than he was liable to pay, he can ask for the refund of the excess tax paid. IT Department refunds this excess payment after going assessment of the ITR filed. If assessee holds back on the Income-tax return filing of the current year then he might get delayed refund or no refund at all for the concerned previous year’s income tax.

If you are an salaried employee, you are required to file ITR and claim the refund of the excess TDS deducted from your income. Unless you file the ITR, you have to forgo the refund of the tax paid.

  1. Government Tenders:

Tender Scrutiny Committee considers the income tax return filed for previous 3-7 years of the applicant of the tender to decide the worth of the assessee. Thus, if you wish to expand the scale of your business with projects from Government tenders, be regular to furnish the income tax return.

  1. Deprived from benefits:

With the timely filing of Income Tax Return and recording the income with the Government, the assessee gets many benefits as it defines the financial worth of the concerned assessee. The track of ITR filed defines the financial capacity by creating a capital base of the person. For processing loan for both business purpose or personal loan, ITRs filed previously are the prime and supportive documents. Also, for an individual, apart from loan processing, ITR is also a vital document for visa processing and high-risk insurance cover.

With all listed above, the non-filing or delayed filing of the ITR would impact you with adverse consequences, especially for the businesses. The upcoming due date for Income tax Return filing is 31st July 2018 for F.Y. 2017-18 and A.Y. 2018-19. If you are still looking for assistance in filing your income tax return, experts at are here to guide you with the requirements. For CA assisted ITR filing, dial toll-free number 1800 313 4151 or write us at

Share This Post:

CS Prachi Prajapati
About the Author

CS Prachi Prajapati

Company Secretary with a forte in content writing! Started as a trainee, she is now leading as a Content Writer and a Product Developer on technical hand of The author finds her prospect to carve out a valuable position in Legal and Secretarial field.


  1. Akshara Finserv 06/07/2018 at 1:28 pm - Reply

    excellent post.

  2. Kishan 06/08/2019 at 1:25 pm - Reply

    Great post for Income Tax filing

Leave A Comment