The penalty for not filing a tax return on time is 5% per month of the tax amount owed plus interest. The penalty for late filing or not filing is severe in comparison to not paying taxes . In percentage terms, the penalty for not filing a tax return or an extension is 5%, whereas the penalty for not paying your taxes on time is just 0.5%. Also note that, if no tax is owed, you don’t have to pay any penalty for late filing of the tax return, because computation is done on the tax amount owed as on due date.
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