Business Mantra News
Last date, 31-07-2017, of filing Income Tax Return (ITR) is approaching very fast. Authorities may or may not consider to extend last date of filing ITRs, but it is always advisable not to wait for the last date.
Most of the people think that even after the last date there is no harm in filing their ITR within 31st March. It is a common myth, if the tax in the form of TDS or the Advance Tax, has already been paid, one can file his ITR up to next 31st March, since he would not be charged with any delayed interest or penalty. But under The Income Tax Act, 1961, there are many drawbacks in filing the ITR after the last date such as:
- No Carry Forward of Losses: If any tax-payer has incurred loss in a financial year, he can carry forward that loss in the next financial year and that loss can be set off from the profits of the next year’s income. This facility is not possible if the ITR has been filed after the last date.
- Interest on Tax Due: Late filing of ITR attracts interest @ 1% per month or part of the month on the due tax amount till the month of filing the ITR.
- Loss of Interest in case of Refund: If some refund was claimed on the ITR, where some excess TDS or Advance tax was paid, Income Tax Department pays interest on the amount of refund from April of the assessment year. But if the ITR through which refund is being claimed has been filed after the due date, then the calculation of interest would be from the date of filing the ITR.
- A new section has been introduced in the Finance Act, e. 234(f) which provides for a penalty of Rs.5000/- for ITR from 2017-18 onwards if the same is filed after the due date i.e. 31st July but before 31st December of the relevant year And if filed after 31st December the quantum of penalty shall be Rs.10000/-.
- Furthermore a relaxation has also been introduced to revise the ITR even after the end of financial year
Hence, if one wants to keep oneself free of tension and follow financial discipline in life, payment of taxes within time and filing of correct ITR within the stipulated time is required.