Problems for not filling income tax return before due date

Every individual liable to pay tax in India is required to file income tax return before the due date as specified in income tax act 1961. Due date is different from person to person and is decided by Income tax department. Some people also call it last date of filling income tax return. But in reality, due date is not the last date.

If someone missed the due date then he or she can still file IT return within a period of 2 years from the end of the financial year concerned. But in such cases, assessee may be required to pay interest and penalty for not filling of income tax return in time.

In this article, we will be discussing problems that arises for not filling income tax return before the due date.

Before getting into problems that may arise for not filling IT return before the due date, let us first know income tax due date that is applicable to an individual in different circumstances.

filing income tax return before due date

IT return filling Due date for individual

Income tax return filling due date for an individual is 31st July of the assessment year. In case the individual is liable to tax audit then due date will is 30th September of the assessment year. These due dates can be extended by CBDT. If its extended then such extended date will be considered as due date of filing for that assessment year.

For financial year 2014-2105 i.e. 1st of April 2014 to 31st March 2015, income tax return filling due date is 31st July 2015. If the individual is liable for tax audit then 30th September 2015 will be the actual due date.  For assessment year 2015-2016, due date for filing has been extended to 31st August 2015.

An individual will be liable to tax audit only when his or her turnover during the financial year exceeds Rs. 1 crore. If the individual is getting income from his or her profession then turnover limit is Rs. 25 lakhs.

What if return filling due date is missed

If you missed the due date of filling income tax return then you can still file it within 2 years from the end of the financial year concerned. However, you may be liable to penal interest and penalty of Rs. 5000 per year of default.

If you want to avoid penalty then file your income tax return before 31st march of the assessment year i.e. file before 31st march 2016 in case of financial year 2014-2015.

Penalty provision will attract only when you file your IT return after one year from the end of the financial year. Penalty is also a discretionary power of the assessing officer. Individual is not required to pay penalty at the time of filling IT return. If assessing officer wants then penalty will be levied or else you are not required to pay.

As discussed above, an individual can file income tax return before 31st march of the assessment year without penalty. However, in case tax liability not paid before the due date of filling then interest will be levied on the amount of tax that is unpaid. Interest at the rate of 1% per month will be paid on unpaid amount after the due date.

If your total unpaid tax liability is more than Rs. 10000 then, you are also liable to pay additional interest @1% per month under section 234C for not paying tax in advance.

Apart from interest and penalty there are also some additional benefits which will be missed by the individual for not filling income tax return before the due date. Here are the benefits which will not be available to the individual;

  1. An individual cannot revise his or her Income Tax return in case of mistakes in original IT return filled after the due date i.e. 31st July or 30th September or the extended date. Which means a late return or belated return cannot be revised.
  2. Business and capital losses cannot be carried forward to subsequent financial years to offset against that year incomes. However, house property losses and unabsorbed depreciation can be carried forward even if IT return is filled after the due date.

To avoid all these problems we suggest you to prepare yourself after the tax year is over. Collect all those documents that are relevant for your IT filling and then find out the tax liability if any and paid it along with interest if applicable. After this you can proceed in filling income tax return.

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