So you missed the income tax filing deadline of August 5. While you need not panic as the tax laws allow you to file your returns till March 31, you will be levied 1% interest on tax liability (gross tax liability less TDS) per month for late filing of taxes returns beyond the stipulated August 5 deadline along with additional interest liability on late payment of taxes.

Let us try to understand above rule with one example.

Put simply, you can still file your income tax returns, of course with the penal interest on tax due. But yes, you have to keep a few things in mind.
You have lost the right to file revised returns in case of any error or discrepancy in their form. Hence utmost attention needs to be given while filing returns capturing all transactions as there would be no second chance to file it again.

Having already foregone several concessions including not being allowed to carry forward business loss due to missing the deadline, it would be appropriate to check bank transactions, other records and 26AS statement available at income tax website properly, to avoid any further gaps while computing the tax.

Form 26AS contains details of tax deducted on your income by deductors as also by collectors, advance tax paid, self-assessment tax payments, regular assessment tax deposited by the taxpayers (PAN holders), refund received by you during the financial year and high value transactions in respect of shares, mutual fund etc.

Missing deadline also means, an assesee will not be able to carry forward the losses incurred in the capital market, though loss under the income head house property is allowed. The losses pertain to the interest paid on the home loan by the assesee.

Further, if the assesee continues to fail in filing his returns till March 31, 2017, he could be levied an additional penalty of Rs 5,000, which is subject to the discretion of the assessing officer.

In the era of big data analytics, assesees must bear in mind that the income tax department and the assessing officers are well equipped to compile transaction details of individual tax payers through various sources like cash deposit in saving account (in aggregate exceeding Rs.10 lakh), sale or purchase of immovable property (for Rs.30 lakh or more), credit card bill payment above Rs.2 lakh etc, based on which it can issue the notice of non-filing of return of income or filing of inaccurate particulars of income.

If refund is due to you and refund amount is more than 10% of your gross liability, you are entitled to interest @ 0.5% per month from 1st April. However, as per recent amendment, you may lose the interest from 1st April till the date of filing return of income, if return is filed after August 5.

Let us try to understand above rule with one example.

So before you lose the interest component for the month of August, get down to the business of filing returns this month itself.