The deadline for filing income tax returns is July 31 for the last financial year. Despite this deadline being an extremely familiar and well known, many people still miss it for various reasons. Reasons may be genuine or simple procrastination. In case you miss the deadline, there are ways to retrieve the situation by filing late returns under various clauses. Discussed in this article are various types of cases where tax returns are not filed by the specified deadline of July 31. Most of the taxpayers who miss this deadline will fall under one of the following categories whose case is discussed below.
Nil tax pending
This includes all such people who have either paid advance tax or have resorted to TDS and thus have no outstanding taxes to be paid. This is a comfortable situation. One can fill the returns by the end of that financial year without any penalty being levied. Thus, for the current assessment year one can safely file returns by March 31, 2013. However, in case of filing returns for the current assessment year beyond that date will result in a penalty of R5,000 which is again at the discretion of the assessing officer.
With tax pending
In the case of an individual who has certain amount of unpaid tax pending due to various reasons such as income from other sources or change of employer in middle of the year, the return can be filed even after the deadline up to the end of the assessment year. However, a penal interest of 1% will be charged on the outstanding amount of unpaid tax. For example, if an individual has a net tax payable of R1,00,000 and has paid R60,000 through TDS and R30,000 as advance tax, then the outstanding amount is R10,000. For this outstanding amount of R10,000, he will have to pay a penalty of R100 which is 1% of that amount for each month delayed beyond July 31 in case the return is filed by March 31, 2013. Thus, the net tax payable if paid in October 2012 in this case will be R10,000 plus 3% of R10,000, which is R10,300. However, if the same return is filed after March 31, 2013, say April 2013, there will be an additional penalty of R5,000 (as applicable in the previous case) making the total amount payable as R10,000 + R5,000 + 9% of R10,000 which is R15,900. These provisions for late filing and additional penalty clauses are detailed in the section 234 of the IT Act.
Tax refund due
In this case also one can file the returns after July 31 to claim the amount due for refund. However, the only disadvantage in such a situation is that the refund claim will be processed late and thus, the actual receipt of the refund amount may take considerable time.
Losses to be carried forward
For individuals who have losses incurred in the current assessment year and wish to carry forward the same for exemption in the subsequent years, not filing returns by deadline of July 31 has the biggest disadvantage. Irrespective of the fact that whether you have outstanding taxes due or not, in case the return is not filed on time, the losses incurred in this year cannot be shown to offset income so as to get exemption in the next year. For such individuals, it becomes mandatory to complete the process of tax filing before the deadline to avail advantage of tax benefit in the subsequent years. The only exception in this clause is losses incurred on housing property where one can carry forward the losses even if the return is not filed before July 31.
Irrespective of the category that one falls in the above discussed cases, there are a few disadvantages that one will have to bear in case the returns are not filed before the deadline. First of these problems is that in case return is filed after the deadline then there is no revision of the same permitted. This implies that the individual can no longer file a revised return for that assessment year. The other disadvantage is that certain exemptions under Section 80 are not available to assessees who file their tax returns after the due deadline.
Filing tax returns have been made extremely simple and easy in past few years. The wonderful provision of online filing is also available to all individual assesses. Thus, one must endeavor to file returns before the deadline to avoid missing out on exemptions being given by the IT department.