CA Sandeep Kanoi

CA Sandeep KanoiDue date for Filing Income Tax Return for Assessment Year 2016-17 for  Salaried Persons and other Assessees who are engaged in business and profession and whose turnover is less than  Rs. 100 lakh (in the case of business) and Rs 25 lakh (in the case of profession) is 31st July 2016.  In this article we have detailed in the form of Question answers Consequences of Delay in Filing Return of Income or of Filing Return after the due date.

Please Note- Tax Audit Limit for Professionals been revised to Rs. 50 Lakh from Assessment Year 2017-18 with a Higher Presumptive Rate of Taxation for those who are having Turnover Below Rs. 50 Lakh. Further theere is also changes in Provisions related to belated Return from Assessment Year 2017-18.

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Question:-First, what are the due dates?

Answer:- Assessees having income from salary have to file return of income before July 31 of the assessment year. This is the `due date’ prescribed in section 139(1) of the Income Tax Act, 1961.

Self-employed businessmen and professionals, and those deriving income from let-out property too have to file their returns by this date.

However, businessmen and professionals with aggregate turnover/annual receipt exceeding Rs 100 lakh (in the case of business) and Rs 25 lakh (in the case of profession) have time up to September 30 for filing their return of income.

Question:-Are there any benefits in filing by the due date?

Anwer:- An assessee filing return by the `due date’ provided in the statute is eligible to file a revised return if he discovers any omission or wrong statement therein. Time limit for filing revised return is one year from the end of the assessment year or before completion of assessment. No penalty would be levied for filing a revised return on voluntary basis.

Question:-So, by filing late, does one lose the revision option?

Answer:- Yes. If an assessee does not file his return within the `due date’ and files his return subsequently, he cannot have the benefit of revising the return, as the return filed beyond the `due date’ is treated as `belated return’.

Question:-Any other advantages of sticking to the deadline?

Answer:-The taxpayer gets the advantage of carry forward and set off of losses, such as loss from business and loss under the head `capital gains’. If the return is filed beyond the `due date’ mentioned in section 139(1), these losses cannot be carried and set off against the income of subsequent years.

You cannot carry forward following losses in case of delayed filing:

  • Speculation loss,
  • business loss excluding loss due to unabsorbed depreciation and capital exp on scientific research,
  • short term capital loss,
  • long term capital loss,
  • loss due to owning and maintenance of horse races

Yet another advantage of filing return before `due date’ is the eligibility for interest on tax refund from April 1 of the assessment year.

Question:-Can delay, therefore, be wasteful for `refund’ cases?

Answer:-Yes, because where the return is filed after the `due date’, interest on refund is paid only for the period from the month of filing the return to the date of refund. In other words, no interest is paid for the period from April 1 of the assessment year to the date of filing the `belated return’.

Question:-Do those with `nil’ tax liability have anything to fear?

Answer:-Where the return is filed beyond the `due date’, the taxpayer has to pay interest if any, on tax liability existing beyond tax deducted at source (TDS) or tax collected at source (TCS) or the advance tax paid. The question of interest does not arise where tax due for payment is `nil’, as would be in the case of most salaried people who pay their taxes through the TDS route. Legally, a taxpayer can file his return before the end of the assessment year without any penalty (however with penal interest under section 234A). Again, the question of penal interest does not arise in the `nil’ cases discussed above. For the assessment year 2014-15, return of income could be filed up to March 31, 2015.

Question:-How costly can delay in filing IT return be?

Answer:-Apart from interest and penal interest, there are other implications. If the return is filed after March 31, 2017 but before March 31, 2018 the AO (Assessing Officer) could levy a penalty of Rs 5,000 under section 271F. Even when there is no further tax payable on the income admitted, penalty under section 271F is leviable for the delay. If the return is filed after March 31, 2018 then such return would become an invalid return.

Question:– Can Assessee be imprisoned for Non-Filing of Income Tax return?

Not filing tax returns on time can land you in jail. This can happen if the I-T authorities feel the assessee wilfully failed to furnish returns on time and the tax due is more than Rs 3,000. Under section 276CC of the I-T Act, if the amount of tax exceeds Rs 25 lakh, the assessee can be sentenced to rigorous imprisonment for anywhere between six months to seven years, and fined. In other cases, imprisonment can be between three months and three years, with fine.However, these penalties are levied in a very rare case. In most of the cases, the taxpayer is only required to pay interest @ 1% for late deposit of income tax.

(Republished with amendments)

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  • raj

    Sir i have started my company at 2014 and my losses is about 6-8 lacs while registered capital was only 1 Lac(it is because i don’t had ,much idea about RTI.) because i was belong to a middle class and that amount is matter for me and my financial situation so in Dec 2014 i paused my company to avoid from these losses. now i want to start it again and want to update all thing related to documents, untill i did not submit return of 2015-16 and 2016-17, what fee should i have to pay or what step should i take

  • MP

    from ass Yr 16-17 the banks will be deducting TDS even for their members in-spite of giving form15H/G but will that not reduce the interest eligible on a cummulative deposits if kept for the entire period of 3 years because the bank cummulates interest after every 3 months and accordingly the final interest is mentioned on the receipt of the FDR, but as the banks will be deducting TDS every quarter if the total interest

    exceed 10000 the investor will loose the benefit of compounding

  • Sajid Shaikh

    Sir, I have not filed my income tax return for AY 12-13 and refund comes to Rs. 12 Lack what should we do, TDs reflects in 26AS.