in mind. While the return can be filed online, it has to be done within two years of the end of the financial year or before completion of the assessment, whichever is earlier.
This year, the government extended the deadline by five days as there was a rush to file returns through both online and physical modes. The Central Board of Direct Taxes (CBDT) has made online filing compulsory for taxpayers who have total income of more than R5 lakh. Also, physical filing of returns for taxpayers with income below R5 lakh is a must now..
As a result, till August 5, about 123 lakh returns were e-filed. Last year, till the same time, about 73 lakh e-returns had been filed. In fact, on the last date itself, about 6.92 lakh e-returns were filed. Also, up to August 5 this year, 87,13,493 returns were e-filed under ITR 1 and ITR 2, which is almost 86% higher than the same period last year.
ITR 1 (known as Sahaj) is filed by individuals having salary/pension income; or individuals having one house property income; or individuals having income from other sources (excluding lottery income and income from race horses). ITR 2 is filed by any individual who doesnt satisfy the above conditions mentioned for filing ITR 1 or has exempt income above R5,000; individuals and Hindu Undivided Family (HUF) having capitals gains, income from two or more house properties, other sources or having brought forward losses; individuals and HUF not having income from business or profession.
In case there is any tax payable and the taxpayer files returns before March 31 next year, he will have to compute the additional interest liability and deposit the amount before filing the returns.
If that is not done, the income-tax department can initiate an assessment. An interest at the rate of 1% per month is payable on the balance amount of taxes deposited from the due date of filing of tax returns till the date when the return is actually filed under Section 234A of the Act. 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.
If you file your returns after March 31, 2014, (for FY 2012-13), the income-tax department will levy a penalty of R5,000.
If tax returns are not filed within the due date, there could be a delay in getting refunds as well. As the income-tax department needs time to process returns, their priority would be for those having been filed before the due date. With growing e-filing of tax returns, the average time of processing has now come down from an average of 14 months during the manual processing to 47 days. This would also save the government the interest paid for the delay in refund.Also, if a taxpayer does not file returns on time, he cannot carry forward losses. So, if you have incurred business or capital loss (other than loss from house property) during the year, you shall have to forego the right to carry them to future years if returns are not filed on time.
In case of returns filed by the due date, the loss is allowed to be carried forward for eight years for setting off against incomes of future years, subject to certain conditions and this set-off can help reduce tax liability of the taxpayer for the future years. As per the I-T Act, only returns filed by the due date can be revised. So, you can file a revised return only if you met the August 5 deadline.