06 Aug, 2013 11:05 AM

Deadline over, what if, if you have not filed your IT return?

The due date for filing income tax returns for financial year 2012-13 (FY13) was August 5. (IT filing returns deadline extended by 5 days to August 5) It was extended by five days because of the increase in the number of e-filing returns that caused a sudden increase in the load of the income-tax portal.

What happens if you have not filed your tax return even by the extended date? The Income-tax Act, 1961 (‘Act’) provides you an option to file a ‘belated return’. A belated return can be filed within two years of the end of the financial year or before completion of the assessment, whichever is earlier. In simple words, the tax return for FY13 can be filed by March 31, 2015 if there is no assessment.

If you are filing your returns after March 31, 2014, then the tax authorities can levy a penalty of Rs 5,000 under Section 271F of the Act. Hence, it’s always important to file your return at the earliest possible, even if you have missed your deadline.

Consequences of not filing the return on time

No carry forward of losses: If your tax return for FY13 has not been filed by August 5, and you have incurred business or capital loss (other than loss from house property), you will have to forego the right to carry forward them to future years. In case of returns filed by due date, the loss can be carried forward to eight years and set-off against future incomes, subject to certain conditions. This set-off can help reduce tax liability of future years.
Additional interest payout: Interest at the rate of 1 per cent per month is payable on the amount of taxes short deposited from the due date of filing of tax return till the date when return is actually filed under section 234A of the Act. Additional interest at the rate of 1 per cent is payable for delay in payment / shortfalls in the payment of advance tax. Thus, even if you file a belated return, it is advisable to deposit the outstanding tax liability at the earliest so that the interest liability is minimised.
Delay in refund: If you have a refund, there may be a delay in getting the refund. The tax authorities require time to process the return and if you have filed the return on time, you may be lucky to get the refund earlier, as the tax authorities are also required to pay interest for any delays in issue of refunds.
No future revision of returns: According to the provisions of the Act, only a return filed by due date can be revised. Thus, if you have not filed your return on time and are filing a belated return, you will not be able to revise it again. Individuals who have filed returns by August 5 can file a revised return if they find some errors or omissions.

It is better late than never. So it’s better to file a belated tax return rather than not file the return at all. A duly filed and acknowledged tax return serves as important document for various purposes and banks and other authorities generally ask for the tax return to verify the credit worthiness of a person.