Lot of people misses the deadline every year due to lack of time or plain laziness. Did you miss it too? In case you have, do not worry, you can still file the belated return.  As a tax payer, you are likely to fall under one of these 4 categories. The associated rules and implications are outlined below.

Case 1: No pending Tax Liability

Cases where all the taxes has been paid through TDS or advance tax and you don’t owe any more to the tax department. This is the safest situation. The Income Tax return for any assessment year can be filed till the end of that assessment year without any penalty. If it is filed after the end of the assessment year, there is a lump sum penalty of Rs. 5,000.

For Example, for the current assessment year 2013-14, the deadline for filing the return is 31st July, 2013. If you missed the deadline, then you can file the belated return till March 31st 2014 without any penalty. However, if the return is filed after March 31st2014, then you will be subject to a penalty of Rs. 5,000, which is dependent upon the discretion of the assessing officer. It has been noticed that the fine is usually not levied for online return filing.

Case 2: Tax Liability Exists

This is the case where you still owe taxes to the Govt. It can happen due to many reasons. For example: If you have income from other sources, you have worked in more than 1 company, etc. In such cases, the basic rule remains same, i.e. the Income Tax return for any assessment year can be filed till the end of that assessment year without any penalty. You will be liable to pay a penalty of 1% interest on the balance tax payable.

Let us understand this case with an example:

Mr. X’s Tax Liability (Net Tax Payable) be Rs.70,000

TDS deducted by employer Rs. 55,000

Advance/Self-Assessment tax paid be Rs.8,000

Balance Tax payable by Mr. X is Rs. 7,000 (70,000 – 55,000 – 8,000)

Suppose Mr. X files the return before the end of the assessment year (i.e. Before March 31st, 2014). In this case if Mr. X would be filing the return 3 months late, Tax Payable would be 7,210 {7,000+3 %( 7,000)}

Suppose Mr. X files the return after the end of the assessment year on July 18, 2014 (i.e. after March 31st, 2014). In this case, he will liable to a penalty of Rs. 5000 along with the penalty of 1% on balance tax payable for 12 months (August, 2012 to July, 2013).

Tax Payable is 12,840 {7,000+(12%(7,000)+5,000}

These rules come under section 234 and there can be multiple components of the interest depending on the actual dates of payment of advance taxes.

Case 3: You have a Tax Refund

If you have any Tax refund and you can file the return even after 31st July without any issue. The only disadvantage will be that your return may be processed late which may delay the refund process.

Case 4: You have carry forward losses

Irrespective of the fact whether you have tax liability or not, if you donot file your income tax return by deadline (i.e. July 31st) then you cannot carry forward the loss of that year. Thus you would lose the benefit of set off of these losses against the income of next year. However, there is an exception to this rule i.e. this rule doesn’t apply to loss from house property, which means this loss can be carried forward even if the income tax return is filed after the deadline.

Important points

· Belated return (Return filed after the due date) cannot be revised

· Some of the Deductions u/s 80 is not available for late return

Conclusion:

Filing a return on time is always a good habit which will keep you away from tax implications especially when you have Tax Liability, Carry Forward Losses and Tax Refund etc. However, if you have missed filing the return, go ahead and file your return now right away.

Source: InvestmentYogi is one of the leading personal finance websites in India

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0 responses to “Filing Tax Return after the Deadline of 31st July”

  1. JD Murti says:

    An Indian pensioner visiting abroad for six months say March to September has to do in filing return ? what care he/she has to take care.

  2. rohit says:

    Belated return can be filed till which date? Please quote the relevant section.

    Rohit Garg

  3. Nitin Jain says:

    In Case 4 above,
    in the first line, there should be ‘ don’t ‘ instead of ‘ do ‘.
    The line will be:-
    Irrespective of the fact whether you have tax liability or not, if you DON’T file your income tax return by deadline (i.e. July 31st) then you cannot carry forward the loss of that year.

  4. CA S K KABRA says:

    The authorn has not taken care of the INTEREST payable u/s 234B for insufficient payment of ADVANCE TAX. This unitended lapse may mislead any taxpayer.

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