You should efile your returns well within the stipulated deadline to avoid penalties and future problems with the tax department.

The deadline for e-filing tax returns (ITR) has now been extended to August 5, 2017. If you were finding it difficult to file your tax returns by the earlier July 31 deadline, the 5-day extension must have come as a welcome relief.

If you have all the necessary documents including your Form-16 with you, don’t’ dither this time around. Try to efile your returns well within the stipulated deadline to avoid penalties and future problems with the tax department.

Here how some adverse fallouts of not filing your ITR on time:

You cannot claim a tax refund

Your employer may have deducted more tax at source than you needed to pay during the financial year (in this case 2016-17). This could be for reasons such as delay on your part to submit investment proof for tax deduction. In such a case, you would be entitled to refund of tax from the Income Tax Department.

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However, if you file your ITR after the deadline ends, not only will your refunds be delayed, you would lose out on the interest on the excess tax deducted that the revenue department would have paid to you.

“If you have a tax refund due, you get interest on it from the beginning of the financial year, which is from April. If you file tax returns after the deadline, you will still get a refund but not the interest accrued in the past 4 months,”Archit Gupta, Founder & CEO ClearTax told Moneycontrol.

You may have to pay penal interest

Despite the TDS getting deducted every month by your employer, it is still important to file your taxes. Filing ITR beyond the deadline could attract Section 234A of the Income Tax Act which means taxpayers who have to pay tax will be levied an additional interest of 1% per month till the returns are filed.

The Income Tax Department allows you to carry forward your losses from business or profession, capital loss, etc. to the next assessment year if you file your ITR within time. However, if you miss the deadline, you will not be allowed this facility.

Tax experts say the government’s decision to extend the ITR filing deadline is a welcome move and it would enhance the number of people filing returns.

“The extension of deadline will not only give extra time to tax filers but will also increase the number of return filers this year,” said Abhishek Soni, CEO & Co-Founder at Tax2win.in.