The IRS Finds Your Mistake People make mistakes all the time—and that includes the IRS. The IRS might notice your mistake and send you a notice to correct your return. If this happens to you, don’t worry—just complete the appropriate tax form by the deadline written on your notice.

How does the IRS catch unreported income?

Unreported income: If you fail to report income the IRS will catch this through their matching process. If the IRS notices that a third party reported that they paid you income but you don’t have that income reported on your return this immediately lifts a red flag.

What happens if income tax return is not filed?

Even a few of deductions are also not eligible to the assesse in case the return is filed after the due date 3. If the return is filed beyond the `due date’ mentioned in section 139 (1), few losses cannot be carried and set off against the income of subsequent years. Not filing of Income tax returns on time can land you in jail.

What happens if ITr is not processed by Income Tax Department?

Usually, if there are issues, errors, omissions or irregularities in the income tax returns, then the income tax returns form doesn’t get processed. However, the taxpayer has the chance to rectify the problem by filing the revised income tax returns or by raising a grievance for ITR not processed.

Is there penalty for not filing income tax return in India?

This penalty will vary between 100% to 300%. Tax Refund will be Delayed: Even after tax refunds have been paid off, there remains a certain amount of money that the Indian Government can withhold. Therefore, if you have failed to file your income tax return on time, you will miss out on the previous year’s refund as well.

When do income tax returns have to be processed?

As per the law, the Income Tax Department must process all ITR applications within a year following the financial year for which returns were filed. This one-year period which immediately follows the financial year is also called the assessment year. Therefore, all income tax returns filed for the FY 2019-20 should be processed by 31st March 2021.