Normally, the deadline to file your income tax returns is July 31 every year. This year, as it often does, the government extended the deadline to August 31. This is done not just to accommodate last-minute filers but also to provide more time to tax payers confused by the number of ITR forms there are today. If you have missed the July 31 deadline, you should not miss the extended deadline under no circumstances. If you miss it, there will be penalties to pay — steep ones, if you're in the high income bracket.
From assessment year 2018-19, delayed filing of ITR will attract penalties. The filing of returns after the due date is termed as belated ITR filing. Here is a brief look at the penalties and other aspects of a belated returns filing.
What if you miss March 31 deadline?
If you miss the March 31 deadline, your options become difficult. For filing the returns for AY 2018-19, you will have to file a Condonation of Delay request to the Income Tax Department. It needs to be filed within six years from the end of the Assessment Year (AY) in which the returns had to be filed. For AY 2018-19, the deadline would be March 31, 2024. This provision is not straightforward. You need to be able to provide a genuine reason for being so late in your ITR filing. If you have suffered genuine hardship, if your tax dues claim is genuine, and if you are eligible for a refund, you may be allowed to file your belated returns. The income-tax department must respond to your application within six months of receiving it. Despite this, since you have missed the deadline for filing your returns, you may still have to pay penalties along with interest on taxes due.
Filing revised tax return
Earlier, a taxpayer was allowed to file revised returns two years from the end of financial year. But from this assessment year, the time limit for filing revised ITRs has been changed to one year from the end of financial year. So, in case of a mistake, you have time till March 31, 2019 to file your revised return for financial year 2017-18. Avoid the stress of additional paperwork, late payment penalties and having to pay your tax dues with interest. Best file your returns now.
Penalties for late filing
Earlier, the belated filing of income tax returns after the July 31 due date attracted a penalty only in exceptional cases. But from this assessment year, the income-tax department has introduced a penalty of Rs 5,000 for filing ITRs after the due date, which is now August 31, 2108. You will have to pay a higher penalty of Rs 10,000 as penalty if you make your filing after December 31, 2018 and before March 31, 2019. However, for tax payers whose total income is below Rs 5 lakh, a fixed penalty of Rs 1,000 will apply.
You will pay interest
In case you have tax dues in a financial year and are filing your returns belatedly, you will have to pay an interest under sections 234A, 234B and 234C of the Income-Tax Act, 1961. The interest will be charged on the unpaid tax from the due date, which is now August 31 for 2018. So it’s better to file your returns as soon as possible and avoid additional interest burden on your tax dues.
Cannot carry forward losses
From this assessment year, in case you file a belated return, you would not be able to carry forward capital losses (except those from a house property) into the next financial year. You can also not carry forward certain losses arising from business in the next financial year. This means you would not be able to reduce your tax liability.