Non-filing of tax return despite of having taxable income carries penalty and prosecution exposure. Also, non-filing of tax return with negative income by due date prohibits the carry forward of such losses including the losses in the past years, if any, to the subsequent year for adjustment against subsequent year(s) positive income. Taxpayers are liable to furnish the tax returns even in situation where tax payable is negated by the taxes withheld by the customers.
Further, it may be noted that non-payment of tax, i.e., tax evasion can attract interest, penalty and prosecution.