Penalty for late filing of income tax return for company
Filing income tax returns can be a tedious task for businesses, but it is also one of the most important financial responsibilities that a company has. Every year, businesses need to file their income tax returns within the due date specified by the tax authorities. Failure to do so can lead to penalties, which can be quite substantial.
In this blog article, we will discuss the penalty for the late filing of income tax returns for companies and how businesses can avoid it.
What is the Penalty for Late Filing of Income Tax Returns?
The penalty for late filing of income tax returns for companies can be substantial, and it depends on the delay in filing the returns. The Income Tax Department of India levies a penalty of Rs. 5,000 if a company files its income tax returns after the due date but before 31st December of the assessment year. If the company files the returns after 31st December but before 31st March of the assessment year, the penalty amount increases to Rs. 10,000. However, if the returns are filed after 31st March of the assessment year, the penalty amount increases to Rs. 1,00,000.
Apart from the penalty, companies also have to pay interest on the tax due for the period of delay in filing the returns. The interest rate is 1% per month or part of a month on the tax due.
How to Avoid Late Filing of Income Tax Returns?
Late filing of income tax returns can be avoided by following a few simple steps:
- Keep Track of Due Dates: Companies should maintain a calendar of all due dates related to taxes and make sure to file their returns on time.
- Hire a Professional: Companies should consider hiring a professional tax consultant or a chartered accountant who can help them with the filing of tax returns and ensure that they are filed on time.
- Use Technology: Companies can use technology to file their income tax returns online. The government has provided a user-friendly online platform that makes it easy to file returns.
- Maintain Accurate Records: Companies should maintain accurate records of their income and expenses throughout the year. This will help them to file their tax returns accurately and on time.
Filing income tax returns is a crucial financial responsibility for businesses, and failure to file them on time can result in substantial penalties. Companies should keep track of due dates, maintain accurate records, and consider hiring a professional to ensure that they file their tax returns on time. By following these simple steps, businesses can avoid penalties and maintain a good financial standing with the tax authorities.