The taxman has extended the due date for filing income tax returns for FY 2018-19 (assessment year 2019-20) from July 31 to August 31. Now don’t wait till August 31. File your tax return as soon as possible. Last minute dashes often result in mistakes. In any case, don’t miss the August 31 deadline. Not filing the tax return by the due date has adverse consequences.

Penalty
If you don’t file your return by the due date, the taxman will impose a penalty of ?5,000 for filing the return beyond the due date (after August 31) and ?10,000 for filing it after December 31. But the penalty for late filing will be restricted to ?1,000 if the taxable income is ?5 lakh or less.

Extra interest
If you have not paid your entire tax dues, you will have to pay not just the outstanding amount but also interest on this while filing the delayed return. The interest rate is 1% for each month of delay (part of a month is considered a full month for calculation).

So, if you still have to pay ?50,000 as taxes for the year ended March 2019, and you file your return in December 2019 (instead of by August 31), you will have to pay ?50,000 plus ?2,000 as interest -- at 1% for four months (September to December).

Carry-forward restriction
If the return is delayed beyond the due date, you will lose the benefit of carry-forward and set-off losses from business or capital gains. But in case of loss from house property, the benefit is available, even if the return is delayed.

Refund trouble
In case you are entitled to a refund, a delayed return will not just delay the refund, but will also fetch you interest for a shorter period. In case of a belated return, interest on your refund is calculated at 0.5% for each month from the month in which the return is filed. But if a return is filed by the due date, the interest is calculated from the beginning of the assessment year (April).

Other hassles
Often, when you apply for a loan or a visa to travel to some countries, tax returns are asked for. Without this document, you will be at a disadvantage.

Finally, even if you miss the extended deadline, do file your return until the end of the assessment year — the upper time limit to file your tax return (March 2020 for the year ended FY 2018-19). If you are supposed to file returns but do not, you could be prosecuted.