Companies, partnership firms and small businesses enjoying 25-100 per cent deduction on income will lose these and other tax benefits if they do not file their returns by the due date.
Tax payers, including individuals, may have to pay a penalty of Rs 5,000 if they do not file returns by the due date or by the end of the assessment year. If they do not file by either deadline they will be issued a notice by the department and non-compliance will mean additional penalties of Rs 10,000.
Section 80 AC of the Income Tax Act 1969, which deals with denial of deductions unless returns are filed by the due date, will be strictly implemented this year.
The section was introduced in 2006 and the income tax department is serious about implementing the provision in right earnest this year.
The due date for small firms and businesses with turnovers less than Rs 40 lakh is July 31. Besides companies, the due date is October 31 for businesses or firms with turnovers above Rs 40 lakh.
The consequence of not filing returns will be severe. We are creating awareness about the penal provisions, said an income tax official.
Benefits like carry-forward and set-off of business losses, unabsorbed depreciation on business assets and capital loss from income would not be allowed in the subsequent years if returns are not filed by due the date, he added.