Levy of late filing fees under income tax act
Non-filing or delay in filing the income tax return attracts a late fee under section two hundred thirty four F. The amount depends on the total income and the filing date.

• Fee up to five thousand rupees is applicable for high-income taxpayers
  
• One thousand rupees is charged if income is below five lakh rupees
  
• The fee must be paid before or while submitting the belated return
  
• No waiver is available for genuine hardship or technical delay
  

Ineligibility to carry forward losses
A taxpayer who fails to file the return within the due date loses the benefit of carrying forward certain losses. This affects future tax planning and savings.

• Business and capital losses cannot be carried forward
  
• House property loss may still be carried forward if return is filed late
  
• Missed carry forward impacts set-off opportunities in future years
  
• Losses become permanently lapsed unless filed on time
  

Interest on outstanding tax liability
If tax remains unpaid due to non-filing, interest is charged on the unpaid amount. Interest continues to accumulate until full payment is made.

• Interest is levied under section two hundred thirty four A
  
• One percent per month or part thereof is charged on tax due
  
• Applies from the due date of filing till the actual date of filing
  
• No relief or exemption is granted from interest even for minor delay
  

Loss of refund entitlement or delay in refund
Non-filing may result in delay or loss of refund for taxes paid in excess. Refunds are processed only after return submission and verification.

• Refund will not be initiated unless return is filed and verified
  
• Late filing may lead to refund forfeiture in some cases
  
• Interest on refund is not paid for the delay period
  
• Processing of refund is delayed due to compliance defaults
  

Increased scrutiny and assessment risks
Non-filers are often selected for assessment and scrutiny by the tax department. This results in greater compliance burden and document verification.

• Taxpayer may receive notices under section one forty two or one forty eight
  
• Risk of best judgment assessment increases under section one hundred forty four
  
• Department may question unexplained credits or deposits
  
• Profile is flagged for potential mismatch and irregularity
  

Imposition of penalty for non-filing
Penalty may be levied by the assessing officer if the return is not filed. Penalties are imposed in addition to late fees and interest.

• Penalty under section two seventy one F may be up to five thousand rupees
  
• Prosecution may apply for willful non-compliance under section two seventy six CC
  
• Penalty is separate from late fee and may be initiated after a notice
  
• Once levied, penalty must be paid regardless of eventual return filing
  

Restricted access to statutory and financial benefits
Non-filing may disqualify companies or individuals from accessing tax and business-related approvals. It creates problems during audits and financial reviews.

• Companies may face disqualification in tenders or government contracts
  
• Investors and banks may reject funding applications due to non-filing
  
• TDS credit and foreign remittance compliance require return filing
  
• Delays in GST or other tax refunds may occur due to pending ITR