Income tax inevitably has to be deposited in the government’s exchequer. This implies that auditable companies and limited liability partnership firms should file their tax returns well before the deadline (it happened to be 30th September for AY 2017-18). Deviations or deliberate delay in filing can land your firm in serious trouble. Vital income tax return lesson plans prepared from 5 real-life lessons can help you chalk out advance strategies for averting any penalties.
Lesson 1: Avoid Loss of Interest Due on Refund Because of Late Filing
If non-exercise of due diligence on your part has resulted in delayed IT return filing, you stand to lose significant money in terms of interest on the refund. Suppose your firm is entitled to receive a sum of INR 1,00,000 as interest on the refund due. Then, the number of days by which you had deferred the filing would be factored in by IT department for correspondingly reducing the interest pay-out.
Lesson 2: Avoid Imposition of Penalty by Assessing Officer
The Assessment Officer of your area should be convinced about the authenticity of income reported through your e-filing. If any discrepancies surface up during scrutiny, you are liable for a discretionary fine by the officer based on the quantum of deemed financial offense. One of the important income tax return lesson plans is to religiously cross-check each and every posting in the return being filed. In real life, such penalties have been imposed on companies just because some silly mistakes had crept in due to inattentiveness.
Lesson 3: Get your LLP Compulsorily Audited if Turnover Exceeds Set Limit
If your firm has been set up under Limited Liability Partnership Act of 2008 and your annual turnover exceeds INR 40 lakhs in the bygone financial year, you have to mandatorily get your books of account audited. While filing income tax returns, the audit report has to be necessarily displayed through Form 3CA. If Form 3CA is not furnished, your firm cannot claim exemptions available. Some firms which try to misrepresent their revenues have to shell out hefty fines.
Lesson 4: Respect the Tax Demand Notice
If you have received a tax demand notice from the assessment officer, you need to treat it with the utmost professional respect. If the notice contains an amount that you feel overblown or unjustifiably calculated, you can contest the same by logging into the e-filing portal. The stipulated time period is 30 days from the date of issuance of the notice. If the claim made is tenable, you should infallibly pay the remaining tax within a month. Many real-life examples are present wherein defaulting on tax payment has led to incurring of severe penalties.
Lesson 5: Always Pay the Dividend Distribution Tax
As a prospering organization, your company has remitted dividends to all loyal shareholders. However, you have to necessarily pay dividend distribution tax in adherence to Section 115-O for the amount distributed in the form of dividends.
Conclusion: Always Take your Income Tax Return Lesson Plans Seriously
Taxes provide the sustenance needed to run the nation. You need to steadfastly comply with the income tax return filing norms to steer clear of any unwanted penalties. This calls for learning from real life lessons of tax mishaps. Pay your taxes and take your organization to newer heights of success seamlessly.