With the Calendar Year set to culminate in a few days, there are a few income tax deadlines that are set to expire at the same time. These deadlines relate to the filing of belated income tax return (ITR), Vivad Se Vishwas and declaration of foreign assets.
Let us understand each of the three in detail here:
I. Filing of belated return: Typically, the last date to file income tax return (ITR) is July 31 for the preceding financial year. And those tax filers who fail to file their income tax returns by July 31 are permitted to file their tax return three months before the end of the assessment year i.e., by December 31.
However, taxpayers must pay a small fee when they file a belated tax return. For the gross income upto ₹5 lakh, late filing fee is ₹1,000 and for the gross income more than ₹5 lakh, the late filing fee is ₹5,000.
II. Vivad Se Vishwas: The finance ministry department rolled out a dispute resolution mechanism called Vivad Se Vishwas (a Hindi phrase which literally means trust from communication) wherein taxpayers can avoid legal disputes by paying tax before Dec 31.
There are, however, some terms and conditions that apply. For instance, the matter should currently be under consideration by a court of law for this to be resolved under Vivad Se Vishwas. The income tax department released a set of frequently asked questions to resolve the doubts among the taxpayers’ minds.
III. Declare foreign income: Some time ago, the income tax department announced that taxpayers must declare foreign assets and income before Dec 31, failing which they will be made to pay a fine of ₹10 lakh. The rule essentially applies to those taxpayers who failed to report their foreign income in the return they have already filed, and therefore, they are meant to file a revised return with foreign income added to it.
Failure to disclose foreign assets and income can lead to stringent penalties and prosecutions under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
