Business Mantra: Faridabad
Last date, 31-07-2016, of filing Income Tax Return (ITR) has already gone. But this time Income Tax Department has considered to extend the last date to 05-08-2016 due to strike in Banks on 29th and 31st being holiday because of week-end. Those who could not file their ITR, it is an opportunity to file the same within these 5 days.
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:
- One cannot revise his ITR, if it has been filed after the last date of filing: Sometimes the tax-payer finds that he could not include certain income/deductions in his filed ITR, which need to be revised. If the return was filed within the last date then at any point of time, up to the end of the assessment year, he has the advantage of revising his ITR. But he has filed his ITR after the last date, the same advantage does not apply. If ITRs are filed with wrong information even by mistake and such information is detected by the Income Tax Department, the tax-payer is subject to penalties, interest and even imprisonment under various provisions of The Income Tax Act, 1961.But if ITR was filed within the stipulated due date then one can revise the same even up to 31st March, next year But from the financial year 2016-17, the facility of revising ITR shall be available even for the delayed or belated ITRs.
- 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.
- Deduction 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.
- Penalty of Rs.5000/- if ITR filed after 31st March of the Next Year: If the ITR has been filed even after the end of next financial year e. after 31st March of the next financial year then the Income Tax Department can ask for a penalty of Rs.5000/- in addition to the normal tax with interest.
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.