It is quite well-known
that the deadline for filing income tax returns is July 31, yet many people
miss the date for various reasons. Reasons may be genuine problems or simple
laziness.
However, there is no need to panic as there are ways to salvage the situation
by filing belated returns under various clauses.
Nil tax pending
This includes people who have either paid
advance tax or have resorted to TDS and thus have no outstanding taxes. This is
a comfortable situation.
One can fill the returns anytime by the end of
the financial year without any penalty being levied. Thus for the current
assessment year one can safely file returns up to March 31, 2013.
However if returns for the current assessment
year is filed beyond this date then one will have to pay a penalty of Rs 5,000
which is again at the discretion of the assessing officer.
With tax pending
In the case of an individual who has certain
amount of unpaid tax due to various reasons such as income from other sources
or change of employer in the middle of a particular year, the return can be
filed even after the deadline up to the end of the assessment year. However a
penal interest of 1 per cent will be charged on the outstanding amount of
unpaid tax.
For example if an individual has a net tax
payable of Rs 100,000 and has paid Rs 60,000 through TDS and Rs 30,000 as
advance tax then the outstanding amount is Rs 10,000.
For this outstanding amount of Rs 10,000 he will
have to pay a penalty of Rs 100 which is 1 per cent of that amount for each
month delayed beyond July 31.
Thus
the net tax payable, if paid in October 2012, in this case will be Rs10,000 + 3
per cent of Rs 10,000 which is Rs 10,300. However if the same return is filed
after March 31, 2013, say in the month of April 2013, then there will be an
additional penalty of Rs 5000 making the total amount payable as Rs 10,000 +
Rs5000 + 9% of Rs 10,000 which is Rs 15,900.
These provisions for late filing and additional penalty clauses are detailed in
section 234 of the IT Act.
Tax refund due
In this case also one can file
the returns after July 31 in order to claim the amount due for refund.
However the only disadvantage in
such a situation is that the refund claim will be processed late and thus the
actual receipt of the refund amount may take considerable time.
Losses to be carried forward
For individuals who have incurred
losses in the current assessment year and wish to carry forward the same for
exemption in the subsequent years, not filing returns by the deadline of July
31 has the biggest disadvantage.
Irrespective of the fact whether
you have outstanding taxes due or not, in case the return is not filed on time
then the losses incurred in this year cannot be shown for offsetting income to
get exemption in the next year.
For such individuals it becomes
mandatory to complete the process of tax filing before the deadline to take
advantage of tax benefits in the subsequent years.
The only exception in this clause
is losses incurred on housing property where one can carry forward the losses
even if the return is not filed before July 31.
Common disadvantages
Irrespective of the category that
one falls there are, however, a few disadvantages that one will have to bear in
case the returns are not filed before the deadline. The first of these problems
is that there is no provision to revise. This implies that the individual can
no longer file a revised return for that assessment year.
The other disadvantage is that
certain exemptions under Section 80 are not available to assessees who file
their tax returns after the deadline.
Filing tax returns have been made
extremely simple and easy in the past few years. The wonderful provision of
online filing is also available to all individual assesses. Thus one must
endeavor to file the returns before the deadline to avoid missing out on
exemptions being given by the IT department.
Extracts from : rediff
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