The last date of filing income tax return for individuals was 31st July, 2016 which was extended to 5th August, 2016 later on, for income earned in the financial year 2015-16. If a taxpayer has not filed a return by this date then he can still do it under the “belated return” category.
Income tax rules provide that a return can be filed anytime within two years from the end of the financial year to which it pertains. This means the return can be filed by 31st March, 2018 for financial year 2015-16. However, this year’s budget has reduced this duration to one year and therefore, for financial year 2016-17 also, the return would have to be filed by 31st March, 2018. Even those taxpayers who have no tax liability need to file a return if their income is more than Rs. 2.5 Lakhs in a financial year before reducing deductions such as LIC premium, mediclaim etc.
This article discusses the implication of filing a return after the due date.
Interest and Penalties
In case of late filing of return, the taxpayer might have to pay certain additional charges. An interest at the rate of 1% per month is levied on tax due per month until it is paid off. If you fail to file the return until 31st March, 2017 then an additional penalty of Rs. 5000 is levied. This penalty is at the discretion of assessing officer and can be waived off by him.
Setting-off of Losses
The benefit of carrying forward and setting off capital losses/business losses against future capital gains/business income is not available in case of belated returns. The only adjustment and carry forward allowed is in case of loss under the head “Income from house property”.
Interest on Refund
If a taxpayer has paid advance tax or his/her tax has been deducted and s/he is liable to claim refund as the tax paid by him is more than what he is eligible for then s/he is entitled to interest on refund in addition to the refund amount. This interest is calculated for the period when refund becomes due to the time it is paid to the assessee. But, if you have filed your return belatedly, then interest from the date of filing of return till the refund payment only would be paid to you.
So if you are amongst those who have not been able to file their return by 5th August, then there is still time for you. However, do file your return at the earliest to reduce interest and penalties.
