The current financial year (FY) is going to end on 31 March 2016. For tax-related purposes, this date is important. One such is filing pending income-tax returns (ITR). Under the income tax law, if you don’t file your ITR within the deadline (usually 31 July of the assessment year, or AY), you can still file it within two years from the end of the relevant FY. This means that you can file returns for FY14 till 31 March 2016.

So, if you have not filed your returns for FY14 yet, do so before the end of March this year, or else you would have missed the last opportunity.

While there is still some time available to you to file an older ITR, you may not be able to avail some benefits that would have been available to you if the return was filed before the deadline. Apart from that, you might have to pay a penalty or late fee to file your return now. Let’s look at the benefits you lose and what penalty and fees you might have to pay.

WHAT YOU DON’T GET

When you file a belated return, you are not allowed to carry forward certain losses.

Had you filed your ITR on time, you could have carried forward certain losses for the next eight years and got it adjusted against gains during these years. Besides that, if you file late, you can’t revise the filed ITR should you discover an error in it. The window to revise a filed ITR is open only if you file it by the deadline of the relevant year.

LOSSES AND PENALTY

If there is tax due after deducting advance tax, tax deducted at source (TDS) and self assessment tax, then, according to section 234A of the Income Tax Act, 1961, interest will be applicable at the rate of 1% per month up to the date of filing of the return.

Besides that, interest is also applicable under section 234B or 234C of the Act, related to advance tax.

However, these interests are applicable only if there is any tax due on your income for that year.

Filing ITR also makes it possible to claim refund of excess tax paid on the income during the year. You are also entitled to get a refund along with interest under section 244A of the Act. However, in case of a belated return, you may lose interest on the refund, as a delay in filing is because of you.

You may also be charged a penalty of Rs.5,000 under section 271F of the Act, if you file your ITR after the expiry of the relevant AY or one year from the end of the relevant FY.

However, you are not required to pay this penalty while filing the belated return. Levy of this penalty is at the discretion of the accessing officer (AO), and you need to pay it only when you get a notice or letter about the same from the AO. In extreme cases, where the tax payer willfully delays filing returns, there is a provision for higher penalty and also imprisonment under section 276CC of the Act.

So, if you have not filed your return for FY14, better do it before 31 March 2016.