Last Chance to File Income Tax return for FY 17-18 – ONLY 7 DAYS LEFT

Introduction

The deadline to file Income tax returns for the Financial Year 2017-18 (Assessment year 2018-19) without any penalty was of July 31, 2018, which was later extended by one month to August 31, 2018.

 Penalty Clause for Delay in filing of Income Tax Return

Until last assessment year (AY) there was no penalty for filing belated income tax returns. Effective from the financial year 2017-18 a late filing fee was applicable for filing your returns after the due date i.e. 31st August 2018 under section 234F.

 The maximum penalty which can be charged is Rs. 10,000. If you file your ITR after the due date (31st August 2018) but before 31st December 2018, a penalty of Rs 5,000 was levied. For returns filed later than 31st December 2018, the penalty levied will be increased to Rs 10,000. There is a relief given to small taxpayers – the IT department has stated that if the total income does not exceed Rs 5 lakh, the maximum penalty levied for delay will be Rs 1,000.

 Last chance for those who missed to file the returns

Due to the fact that it was the First year, many people are still to file their ITR. If you are among those who missed the deadline to file the ITR for AY 2018-19, you would need to file a belated return. The department allows you to file returns till one year from the end of relevant financial year, in case you miss the deadline. This means that for financial year (FY) 2017-18, which ended on 31 March 2018, you can file returns till 31 March 2019.

 Benefits of filing ITR

Filing your ITR does make you feel responsible and good about yourself, but the benefits don’t end there. Filing your ITR can benefit you in more ways:

1. Easy Loan Approval

Filing the ITR will help individuals when they have to apply for a vehicle loan (2-wheeler or 4-wheeler), House Loan etc.

2. Claim Tax Refund

If you have a refund due from the Income Tax Department, you should file your Income Tax Return to receive the refund as early as possible. However, in case you are filing belated returns, you may lose the interest that would be due on the refund, because delay in filing would be your mistake.  In such cases, interest will be paid from date of furnishing the return to the date of grant of refund.

3. Income Proof

Income Tax Return can be used as a proof of your Income.

4. Quick Visa Processing

Most embassies & consulates require you to furnish copies of your tax returns for the past couple of years at the time of the visa application.

5. Avoid Penalty

If you are required to file your Tax returns but didn’t, then the tax officer deserves the right to impose a penalty of up to Rs.5,000. 

6. Avoid Other Consequences

Apart from the penalty levied by the IT Department, there are other consequences that a taxpayer may face for late filing of returns:

Apart from the penalty for late filing, an interest under section 234A at 1% per month or part thereof will be charged till the date of payment of taxes. It is important to note that ITR cannot be filed if taxes haven’t been paid. The calculation of the penalty will start from the date falling immediately after the due date i.e. 31st August 2018. So, the longer you wait the more you pay.

This interest payment on tax due will be in addition to the late filing penalty

 Our Expert Advice

In addition to the loss of above mentioned 6 benefits Remember that,“tax authorities may even initiate prosecution against the taxpayer if he wilfully does not furnish the return by end of the relevant assessment year & the amount of unpaid tax (after deduction of advance tax and TDS) is their.

In case the taxpayer had missed the due date to file his return, he must file a belated return. A belated return can be filed either by the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.  For the current assessment year, a belated return can be filed any time before 31st March 2019 if the assessee fails to file his return on or before 31st August 2018.

Therefore, it is prudent to pay the penalty and file belated returns, especially if you have tax liabilities