According to Section 87A of the Income Tax Act, an assesee having taxable income up to Rs 3,50,000 for the financial year 2018-19 may get rebate on entire tax payable or Rs 2,500 whichever is less. However, the benefit of tax rebate under this section may be availed only through filing of Income Tax Return (ITR) for the Assessment Year (AY 2019-20).

The Income Tax Department has already started educating taxpayers on this. For instance, in an SMS alert, the Department says, “Return filing is mandatory if income exceeds Rs 2.5 lakh for AY 2019-20. For income up to Rs 3.5 lakh, tax relief u/s 87A can be claimed only by filing return.”

So, an assesee having taxable income up to Rs 3 lakh need not pay any tax, but it doesn’t mean that the taxpayer needn’t file his/her ITR. Similarly, the assessees having taxable income up to Rs 3.5 lakh will get tax rebate up to Rs 2,500 only if they file ITR for the AY 2019-20.

As filing of ITR is mandatory for if total income exceeds Rs 2.5 lakh for the AY 2019-20, people having taxable income up to Rs 3.5 lakh also have to file their ITR. Otherwise, not only they would not be entitled to get the benefit of the tax rebate, but would also end up paying penalty for not filing ITR on time.

So, such assessees having taxable income up to Rs 3.5 lakh will also file their ITR mandatorily on or before the extended due date of August 31, 2019 to avoid paying penalty for late filing, unless the deadline is extended further.

Moreover, if such an assessee having taxable income up to Rs 3.5 lakh doesn’t file the ITR for the AY 2019-20 at all, he/she may face prosecution for not disclosing his/her income through the ITR.

In case no TDS is deducted or insufficient TDS is deducted for an salaried assessee having taxable income up to Rs 3.5 lakh taking into consideration the benefit of tax rebate, such an assessee may face prosecution for non payment of income tax along with provisions of not disclosing income on time and end up paying interest for late payment of tax, late payment fees and penalty for late filing of ITR as well.

So, to avoid tax notice, penalties and prosecution, taxpayers having total income over Rs 2.5 lakh (over Rs 3 lakh for senior citizens and over Rs 5 lakh for super senior citizens) must not forget e-filing of Income Tax Return for the AY 2019-20 on or before August 31, 2019.