Caught between your personal/professional commitments and missed the deadline to file the Income Tax return? Havent yet filed your IT returns for the current assessment year (AY2013-14)? So, what would happen now? Will the applicable tax rate slab change or be higher? Read on. This year, the IT department had to extend the due date of filing the returns (i.e. to 05 th August instead of 31 st July) due to an unprecedented growth in the number of returns filed electronically. With e-filing becoming mandatory for assessee(s) earning an income of 5 lakhs or more, there was a humungous growth in number of returns filed over the internet. More than 1 crore tax-payers have filed returns as on 31 st July 2013 (source: National website of Income-Tax Department). Surely, this number would have significantly changed as of yesterday. So if youre wondering what to do now that youve missed the revised or extended deadline of 05 th
August as well, breathe easy as nothing is much lost - there still is an alternative. If all the taxes are already paid, there will be no additional levies for filing your returns after the due-date. In my opinion, your tax liability or the tax-rate slab will not change, which means that the IT department does not impose tax at higher rates even if the tax returns are not filed within the due date. As per the IT Act 1961, the returns can be filed within 2 year before the end of assessment year latest by 31 st March, 2015. However, a few caveats here - firstly, the department can levy a penalty if the returns are filled after 31st March 2014. Secondly, an assessee is not allowed to carry forward the losses, such as business loss, capital loss and so on, arising in the current AY. Similarly, filing your returns late means that you cannot file a revised return so you cant make changes to it. Notably, tax exemptions under section 80C can be claimed. Therefore, every tax payer should understand the category to which he/she belongs to. So, lets try to assess what could be the consequences late filing. Some notable consequences could be: Salaried employees get their taxes deducted by their employer, on a monthly basis, from their salary. Businessmen pay advance taxes on/before the 15 th of September / December /March of every year. Such assessee(s) whose tax deduction/payments have been regular are allowed to file their returns before 31 st March sans any penalties. If they miss this due- date (i.e. after March, 2014) the department can levy a penalty of Rs. 5,000. Likewise, for assessees who pay advance tax but have to make balance tax payment over and above advance tax or TDS already paid, are also allowed to file their IT returns before 31 st March 2014. Though there will be no penalty levied on such assessees, they have to pay interest @ 1% p.m. on the unpaid amount of tax remaining to be paid. Those assessees who have paid taxes in excess of their actual liability can claim refund from the department. An assessee is not permitted to carry forward the losses from Business/Profession incurred during that assessment year if he/she fails to file their returns before the stipulated due- date. The only exception to this rule being, the losses with respect the house property income can be carried forward. The long and short of all this is that if you've missed yesterday's deadline don't sweat too much. Just Act and Act fast because anyways interest will need to be paid on the unpaid tax liability and it'll keep on rising. The views expressed here are personal. You can reach me on ajlassociates@yahoo.com if you care to.