Those who are required to file ITR for the AY 16-17 and AY 17-18 and have not filed are requested to file well before 31st March 2018.
Income Tax Department has become very vigilant these days. You must have heard from your family and friends about the hassles they had to undergo to clear tax notices received from the income tax authorities. In case your income tax return for Assessment Year 2016-17 & 2017-18 is not yet filed, we recommend that you complete the return filing before 31st March, 2018 and safeguard yourself from getting notice from the Income Tax Department(ITD).
The law has changed and ITR for 2017-18 CANNOT be filed beyond 31st March 2018.
From this year the flexibility in filing tax returns has reduced. Now, if you don’t file the return for financial year 2015-16 & 2016-17 by 31 March, you may face scrutiny and penalty.
If you are among those taxpayers who have not yet filed their income tax return (ITR) for the assessment year (AY) 2016-17 & 2017-18, you must have received emails and messages from the income-tax department reminding you to file the tax return by 31 March 2018.
You must remember that if you had income that was above the exempted limit during FY 2015-16 & FY 2016-17, then it is mandatory for you to file a tax return. If you had income that was less than the threshold limit for taxes to apply, but you deposited a considerable amount of cash in your bank accounts during the demonetization period, you should file a tax return.
What’s different this time around is that unlike previous AYs, when late tax returns could be filed even one year after the end of the relevant AY, now if you don’t file the ITR for the AY 16-17 & 2017-18 by 31 March 2018, you won’t be able to file it later.
Not filing a tax return on time has consequences, and you will lose out on some benefits.
For starters, there are penalties and interest levied on the income tax that was due. “The person who files a belated return for AY 2017-18 may be subject to a penalty of Rs 5,000 under Section 271F of the Income-tax Act, 1961.
Apart from the penalty, interest too may be levied under various sections. “If any tax is due, interest may have to be paid under sections 234A, 234B and 234C of the Act.
From the next AY, 2018-19, a fixed amount of penalty will be charged on belated tax returns. “Section 271F will get replaced by section 234F, which prescribes a late fee of Rs5,000 if the return is filed after due date and up to 31 December, and Rs10,000 (from 1 January) up to 31 March of AY. However, if the total taxable income of a person doesn’t exceed Rs5 lakh, late fee shall not exceed Rs1,000.
Besides penalty and interest, there are other disadvantages to filing tax returns late. One of these is not being able to carry forward capital losses. Certain losses like those from business and profession and short-term capital loss may not be allowed to be carried forward.
If there is any refund, it may be delayed and taxpayers will not receive interest on refund from 1 April of the AY. Interest will be paid from the date on which the tax return was furnished till the date on which refund is granted. “If return is filed within the due date, interest is paid effective 1 April of the AY to the date on which refund is granted. Say, you were eligible for a refund of Rs10,000; you filed the ITR in June, which is before the due date (31 July); and you get a refund in September. In this case, you will get interest on the refund from April till September. But if you file late, say, in October, and you get refund in December, you will get interest on the refund only from October till December.
Do you think CBDT should extend Tax Audit Report and relevant ITR Due Date? Please Comment, Vote, Retweet and Like.— Tax Guru (@taxguru_in) September 18, 2018