Every year the government expects you to pay taxes in time every business has to pay different kinds of taxes like income tax, sales tax, excise tax, property tax and so on. Each of the taxes is calculated depending on some criteria and the total amount due at the end of each year is calculated.
This amount can be paid in installments too. It is good if you pay them before the due date along with filing the due returns for these taxes too. It is the duty of every citizen to pay his or her taxes in time. However, there are a few people who do not comply with this and fail in their duty.
This kind of failure increases the work of the tax collecting offices and also for the taxpayers. At the end of the year, an assessment is made by the tax department as to how much tax is collected and who have paid on time or in advance. Also, they find out who has defaulted and by how much.
These defaulters may have paid a part of the tax or may have defaulted on the full amount of the tax. They may have their reasons. It may range from procrastination to loss in business too.
Whatever the reason the tax department does not want your reason for non-payment of the tax dues but the full tax payment. If you do your duty it is happy but it does not spare the defaulters.
There are strict rules for the businesses that do not pay their tax dues on time. When the tax returns are filed but taxes are not paid you may receive a bill for the amount that you owe to the tax department. This initiates the collecting process.
In case this due date slipped out of memory and ended up on you defaulting on tax payment you may be able to heed to this notice and pay the dues to the tax department.
Yes, you may be levied with some penalty as the monthly late fee and interest on the tax due. This is the punishment for your procrastination. If even at this stage you do not heed to the notice and do not pay your taxes the penalty can increase. The longer the time of default higher will be your debt to the tax department.
This can turn out to be pretty costly for you too.
The interest payable is compounded on a daily basis. This goes on accumulating. The longer time you take to pay your tax dues the bigger the consequences you will face. This can end up in your asset seizure or even incarceration. Will you want this to happen? Of course no.
If the tax due remains unpaid for more than 60 days, the penalty can be raised to 100% of the tax dues.
In case you provide proper reasons for not paying the taxes or even filing the returns then some leniency will be shown, like the penalty may be avoided then.
Yes, it becomes your duty to pay your taxes on time. Ups and downs always come in the businesses. If there is a default, try to pay them at the earliest. If not the full amount try to pay in part and in installments but avoid getting the punishment.