Do you have missed tax return filing?

As per section 2(62A) of Income Tax Ordinance 1984, ‘Tax Day’ means 30 November following the end of the income year. This is the last day of filing tax return by individual taxpayer. But due to COVID-19, one month has been extended for tax return submission without penalty. So, the last day of income tax return filing for individual taxpayer was 30 December 2020.

And finally the extended date for personal tax return filing has expired. So, if any individual taxpayer fails to submit return within the due date then what will be the consequences under tax law? If you want to submit your tax return now, what are the procedures?

Time extension procedures for tax return filing

The procedures to follow in case of failure to file tax return within due date is to apply to the Deputy Commissioner of Taxes (DCT) of your tax circle for time extension. And this time extension application shall be filed to the DCT before the Tax Day. So, you have to confirm that you will not be able to submit tax return within Tax Day.

After receiving your time extension application for return filing, the DCT will consider the reason of your failure. And he may extend your tax return filing upto two months upon satisfaction of your application. You may also watch below video.

If you could not file your tax return within such two months extended time then you will get another two months extension following the same application procedures. But this time, the DCT may extend return filing date with the permission from the IJCT. But you have to pay interest for the delay though you have submitted your tax return with the permission of tax authority.

What is the interest for delay tax return submission?

If any taxpayer fails to file tax return before the expiry of the Tax Day then he may be liable to pay a delay interest at the rate of 2% per month. This interest shall be calculated on the difference between the tax assessed on total taxable income and the tax paid in advance for the assessment year including tax deducted or collected at source.

Provided that the period for calculating delay interest shall not exceed one year. But what will be the consequences in case who has not filed application for time extension?

Penalty for failure to file tax return

In addition to the above mentioned delay interest for not filing return on or before the Tax Day, he shall be liable to pay penalty as per tax law.

As per section 124 of the Income Tax Ordinance 1984, where any person failed to file return without reasonable cause, the Deputy Commissioner of Taxes (DCT) may impose a penalty at 10% on last assessed income. But minimum penalty shall be BDT 1,000. And for continuing default, a further penalty of BDT 50 for every day.

Provided that such penalty shall not exceed BDT 5,000 if the individual taxpayer was not assessed previously. But if your income was assessed previously, the higher of BDT 1,000 or 50% of the tax payable on the last assessed income.