Introduction of Non-Compliance Fees in Income Tax Returns of 2017-18

The Finance Act 2017 has also introduced a fee which will be payable by the taxpayers who file their tax return after the due date.

• The fee payable is INR 5,000 if the tax returns are filed after the due date, i.e., 31 July but before 31 December.
• The fee payable would increase to INR 10,000 if the tax returns are filed after 31 December and before 31 March.
• Non filing of return till 31 March will be considered under-reporting of income (in excess of threshold exemption available to taxpayer) and shall be subjected to penalty @50% of tax payable on under reported income.
• For the taxpayer having taxable income up to INR 500,000, the fee would be restricted to INR 1,000.
• The penalty will be over an above interest liability.

All the new ITR forms issued have appropriate fields to capture this information. This change is designed to ensure compliance in a timely manner and may also give adequate time to the revenue authorities to process the tax returns. This year return filing date is 31 July for taxpayers not subject to tax audits, 30 September for tax payers subject to tax audits and 30 November for taxpayers subject to transfer pricing audits.