Often, people think that an Income Tax Return (ITR) is necessary only for those who pay taxes. But if you avoid filing ITR for years, then this negligence can cause you great harm. There are such provisions in the Income Tax Act, which are very important to know about; otherwise, you may regret it later.

If a person does not file their Income Tax Return (ITR) for several consecutive years, then they may have to face serious legal consequences and a penalty. In fact, repeated negligence or deliberate ignorance not only increases the penalty but can also lead to legal troubles.

It is important to file ITR before this date.
As a conscious taxpayer, you should file ITR on time and follow the rules set by the Income Tax Department. If you have not filed your return yet, then know that the last date for filing ITR for assessment year 2025-26 (ITR Filing Deadline 2025) is 15 September 2025.

Legal risk increases if you do not file ITR repeatedly.

Section 234F

If your annual income is more than Rs 5 lakh and you do not file ITR on time, then a penalty of up to Rs 5,000 is imposed. If the income is less than Rs 5 lakh, then the penalty is Rs 1,000.

Section 234A

1% interest is charged every month on the late payment of tax. Due to this, the tax liability keeps increasing.

Section 276CC

If tax is not paid intentionally, then it can lead to imprisonment ranging from three months to seven years and a heavy fine.

Financial loss and other problems:

1. Loss cannot be adjusted further

If you do not file an ITR, you cannot adjust your business or capital loss in the next year. For example, short-term capital loss can be carried forward to the next eight assessment years, but only if ITR is filed on time.

2. You will not get a refund

If tax has already been deducted from your income (such as TDS on share dividends), then it is necessary to file ITR to get a refund. That is, if you do not file ITR on time, you will not be able to claim a tax refund, which may result in your money getting stuck.

3. Difficulty in getting a loan and a credit card

Banks and financial institutions consider the ITR as proof of your income. Therefore, if you do not have an ITR, you may face problems in getting a personal loan or credit card.

4. Obstacles in visa and business registration

If you want to go abroad or start a new business, it is important to file ITR on time because tax records have become an important document.

The government gave relief, but you will have to pay a price.

Now the government has allowed filing returns for the last 4 years through ITR-U (Updated Return). But for this, additional tax and surcharge have to be paid, which can be up to 70% of the total outstanding tax. Therefore, it is clear that paying tax on time not only saves you from penalty, but also makes you financially strong.

Disclaimer: This content has been sourced and edited from NDTV India. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.