We all know of the Rush of March when taxpayers run helter-skelter to invest under Section 80C. However, the month witnesses another race against timeof taxpayers filing their returns.

This may come as a surprise, but according to the data on online filing, the biggest surge of tax return filing is not witnessed on 31 July, but months later, on 31 March, the last day of the assessment year.

This is because if a taxpayer misses the last date of filing returns for whatever reason, the tax department gives him another chance to be on the right side of the law. He is allowed to file his return till the end of the assessment year without being penalised.

If there is some tax to be paid, he can still pay it, along with a 1% late payment fee for every month of delay.

When the tax filing deadline was extended by a month this year, millions of taxpayers must have heaved a collective sigh of relief. However, many of them still missed the extended deadline.

These Rip Van Winkles will be delighted to know that they have another 6-7 months to procrastinate.

If there is no penalty, why do so many taxpayers rush to file by the due date? This is because if you miss the tax filing deadline, you forego some of your rights as a taxpayer. "You cannot modify your income tax return if it is filed after the due date," says Delhi-based chartered accountant MK Agarwal.

E-filing of returns for the financial year 2010-11 peaked on 31 March this year, not on 31 July 2011.
You also cannot carry forward any short-term or long-term losses. Income tax laws allow a taxpayer to carry forward capital losses and adjust them against future capital gains. You can carry forward these losses up to eight financial years.

"If you suffered capital losses in 2011-12, these can be adjusted against gains made till 2019-20. However, this is possible only if you file your return by the due date," says Agarwal.

If you also miss the 31 March deadline, the taxman gives you another chance at redemption. You can file your return till 31 March 2014, but you can be slapped with a high penalty of Rs 5,000 for not filing on time. However, this depends on the discretion of the assessing officer. If you are among those who missed the deadline this year despite the extension, it's time to get cracking on your tax returns.