Why to File Income Tax Returns by Due Date
Looks like the government has got into serious mode. In the last one month the I-T department has sent about 1 lakh notices to tax defaulters across the nation asking them to file returns and pay up advance tax and other dues.
There is hardly anyone who would be ignorant of due dates but blame it on procrastination- many people miss the deadline and some don’t file it at all. Perhaps if everyone were aware that they might miss out on certain privileges by not filing income tax return on time, some might be motivated to act on time. We will deal with possible consequences of not paying taxes in another article.
Filing income tax returns? Here’s a checklist
Due date for filing I-T return
For a recap, income tax returns are to be filed on or before due date which usually falls on 31st July of the relevant assessment year. Sometimes this date gets extended and the department notifies it. Let’s also touch upon who needs to file income tax returns.
Do you need to file tax returns?
For FY 2013-14 Income Tax Return is to be mandatorily filed by everyone whose income is over Rs 2 lakhs, ie the minimum taxable bracket.
For those whose income is over Rs 5 lakhs it is mandatory to file tax returns online, others can do it online or in paper format. E-filing has certain benefits over paper filing and eventually it will totally replace paper filing of tax returns.
What if you don’t file returns on time
It’s understandable; you could have unintentionally missed I-T return deadline for a variety of reasons. You can file returns by the end of the relevant assessment year without paying penal fees or by the end of the next assessment year with a penal fee, if you are asked to.
Thus income tax returns can be filed belatedly by 2 years; after that you cannot file returns. Therefore tax returns for financial year 2013-14 can be filed by 31st March of 2015 without penal fee or by 31st March of 2016 with a fee if the department so demands.
What could be lost if income tax returns are not filed by due date
If you have deductions to claim or have losses to carry forward you cannot afford to miss filing returns by due date. Here’s why:
1. Any tax refund due to you will be delayed. Refunds can be expected anywhere from 2 months to 2 years.
2. If you have losses to be carried forward to following assessment years, these can be carried forward only if returns are filed by due date of the relevant assessment year. Loss from house property is exempt from this.
What if you don’t file returns at all?
If income tax returns are not filed within 2 years of the financial year, you lose the chance to file it. This means you cannot claim refunds if tax return is not filed in 2 years.