It is the responsibility of every indian to pay tax to the government. This not only increases the revenue of the country, but taxpayers also get many benefits. On the other hand, not paying tax can lead to interest, penalty as well as legal action. Let us know what are the consequences of not paying tax. Let us tell you that there are two types of tax systems in India, old and new. Each one has a different tax slab and different rules. A person can choose them according to his income.
Tax slabs under the old tax systemUp to Rs 2.5 lakh: Nil2.5 lakh to Rs 5 lakh: 5 percent5 lakh to 10 lakh: 20 percentAbove Rs 10 lakh: 30 percentUnder this, people with income up to Rs 5 lakh can claim a deduction of up to Rs 12,500 under Section 87A of the Income Tax (I-T) Act.Tax slabs under the new tax system
Up to Rs 3 lakh: Nil3 lakh to 7 lakh: 5 percent7 lakh to 10 lakh: 10 percent10 lakh to 12 lakh: 15 percent12 lakh to 15 lakh: 20 percentIn this, the limit of standard deduction on personal income is Rs 75,000.These are the consequences of not paying tax
Late filing - Penalty has to be paid under Income Tax Section 234F for filing income tax return late. If your total income is more than 5 lakhs, then you will have to pay a penalty of up to Rs 5,000, while for income up to 5 lakhs, a fine of up to Rs 1,000 will have to be paid.
Interest - Interest is charged under Section 234A of Income Tax on the amount not paid as tax. The Income Tax Department charges interest at the rate of 1 percent every month for delay in filing returns. Similarly, under Section 234B, interest is also charged on advance tax at the rate of 1 percent every month. Whereas under Section 234C, if someone does not pay the installments of advance tax on time, then interest is charged on it at the rate of 1 percent per month.
Notice from Income Tax - Under Section 156 of the Income Tax Department, the Income Tax Department demands tax, penalty or interest from the taxpayer. Ignoring these can lead to legal action.
