The August 31 deadline for filing income tax returns ( I- T) just has got over. Although filing returns on time has its advantages, the government allows individuals to file I- T returns by up to two financial years. For income earned in 2014- 15, the first deadline is usually July 31. This year it was extended to August 31, as new income tax returns ( ITR) forms were notified late. The second due date is March 2016 and if a person misses that, he or she can even file until March 2017. But every time a taxpayer misses a deadline, he or she loses certain benefits and has to pay interest and, in some cases, a penalty. If you couldn't file your returns by August 31, experts say you should start the process right away and try to get done with it by the month- end. The department levies one per cent interest each month on the liability. This means, if you file it before September 30, you will only have to pay one per cent interest. A month after that will attract two per cent and so on. For those liable to advance tax, there is an additional interest of one per cent that starts from April onwards," . There could be some respite if someone would have paid the taxes in time but didn't file a return. According to the new Central Board of Direct Taxation circular that came in February, I- T department can only levy interest on the tax due, and not on the tax that is already paid. If you are salaried, who has tax deduction at source, and has no further tax liability, you are in a comfortable position. If you start now, there are certain benefits that you will miss. Those filing returns on time can always opt for revised returns if they realise that they have made a mistake or have not taken advantage of certain deductions. For example, many are not aware that the department allows deduction of up to ₹ 5,000 spent on health check ups of dependants. Taxpayers filing returns on time, can later go for such a deduction. Latecomers are not allowed to carry forward their losses under the head capital gains and business income. Say, you had losses from stock trading and you wanted to carry them forward. If you will be filing belated returns, you cannot do it now. However, loss under the head income is still allowed. This is the interest that a borrower pays after taking a home loan for buying a property. Tax experts say though there's enough time now, a person should not take it easy. If someone misses even the March 31, 2016 deadline, there will be an additional penalty of ₹ 5,000 for the delay. This depends on the assessing officer though. The officer can issue a notice asking the taxpayer to give an explanation for delay, and if not satisfied can levy the penalty. The tax environment is very aggressive in the country at present. The use of technology has made monitoring and administration very easy for the I- T department. It's always better that the taxpayer remains on the right side of the law and not get in any trouble. |
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