What is the consequence of failing to file income tax returns on time?

Failing to file income tax returns on time can lead to potential fines and interest charges. Tax authorities impose penalties to encourage timely compliance with tax obligations. When an individual or entity does not file by the deadline, the tax authority typically assesses a penalty for late filing, which can be calculated based on the amount of tax owed. In addition to these penalties, interest charges can accrue on any unpaid taxes from the due date until they are settled. This financial impact underscores the importance of adhering to filing deadlines to avoid increased costs related to penalties and interest.

The other options do not accurately reflect the consequences of late filing. While tax credits might be a possibility for timely filers, late filing does not enhance the chances of receiving them. Furthermore, failing to file can impact future tax filings due to the penalties imposed and the potential complications that might arise. Additionally, it does not create increased opportunities for tax planning; in fact, it might limit options due to the urgency of addressing outstanding compliance issues.