You may face rigorous imprisonment if you do not file tax returns willfully in time.
You may face rigorous imprisonment if you do not file tax returns willfully in time.
Income tax section 276CC (of Income Tax Act, 1961) speaks about imprisonment. Please don't take this section lightly because courts aren't taking non-filing lightly. In fact, Mumbai High court has ordered 6 months' imprisonment to two directors of Saloni Jewellers Private Limited.
Section 276CC (of Income Tax Act, 1961) describes the punishment for willful failure in filing tax returns as under:
- Rigorous imprisonment, which shall not be less than 6 months but which may extend to seven years and with fine where tax sought to be evaded, exceeds Rs. 25 lakh.
- Rigorous imprisonment, which shall not be less than 3 months but which may extend to two years and with fine in other cases.
However, you have a life saving relief in the below cases because your tax officer will not proceed against you under this section for failure to furnish in due time the return of income under section 139(1) (of Income Tax Act, 1961), if:
- You furnish your tax return before the expiry of the assessment year; or
- You owe net taxes below ₹10,000 (after deducting TDS, advance tax etc). However, in this case you shouldn't be a company and tax payable on the total income is determined on regular assessment.
- You have furnished an updated return with in the time provided in section 139(8A) (of Income Tax Act, 1961) viz 24 months from the end of the relevant assessment year.
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