Excitement AROUND the new year is building up and plans for parties are in full force. But before you put on the party hat and begin the countdown to midnight, make sure that all your compliances are in place as December 31 is the last day to voluntarily file income tax returns (ITR) for the previous years.

Belated return

Filing your ITR is not just a task to complete that puts you on the nice list of the income tax authorities, but it may also unwrap some personal tangible benefits like availing financial credit, say hola to foreign travel visa and lastly some cash envelopes, in case of tax refunds. All of these require you to file your ITR.

The window to voluntarily file your ITR is only available up to December 31. Meaning if you have missed filing your ITR by the due date (July 31 in case of individuals), you can still file it voluntarily up to December 31. A return filed after the due date but before 31st December is called a ‘belated return’.

Revised return

December 31 is also the due date to rectify any mistakes, omissions or wrong statements made in the original tax return filed before the due date. So, say you have filed your ITR for the previous year and you realise that you have wrongly claimed a deduction under Section 80C, you can revise your return and rectify the error. There are no restrictions on the number of times you can file a revised return, but the time limit for filing such revised returns expires at midnight December 31.

How to file belated or revised return

Filing of belated or revised tax returns can also be done from the comfort of your house, online. It’s almost the same as filing any tax return. Login to your e-portal and choose to either file online or through utility. Select the assessment year and here lies the difference. Under the tab for ‘personal information, you will now need to select Section 139(4) of belated return and Section 139(5) for revised return.

Verification of the return filed

If for some reason you are not able to receive the code send on your registered mobile and email id to e-verify your ITR, you can sign a copy of the income tax return acknowledgement (ITRV) and post it to CPC Bengaluru within 30 days of filing the return.

Consequence of filing belated return

Not filing your ITR within the due date has consequences. Though a window is provided for filing of a belated return, late fees are levied on filing it. The late fees, similar to the slab rate system, depend on the total income. Late fees of `1,000 is payable if the total income does not exceed Rs 5 lakh, else it is Rs 5,000.

Additionally, where income tax is payable after availing TDS credit, you will need to pay interest @ 1% per month from the due date to the date of actual filing of the belated tax return. And most significantly in a belated return, if there are any business losses or capital losses for the financial year, you will not be able to carry forward and set off such losses to future years. Thus plans for tax harvesting, if any, will not work in case of a belated return.

Consequences of non-filing of belated return

If you fail to file a belated return also, you may file a request with the tax department for condonation of delay. It is up to the department to decide whether the delay was due to genuine hardships or otherwise and decide the matter on merits. Also, you may need to file a tax return if a specific notice is received from the department. In such an event, if the I-T department can prove that there was a wilful failure in furnishing the income tax return, you may be subject to prosecution with rigorous imprisonment for up to seven years.

It does not matter if you are a resident or non-resident. The due date for belated and revised returns is the same for all taxpayers. And until the invention of time travel, it would be wise to close this year tax compliant.