March 31 is the last opportunity to file I-T return for FY14 if you missed previous deadline. Conditions apply
If you are yet to file income-tax return for the previous financial year (FY14/assessment year 2014-15), you still have a chance to do so by March 31. However, if you miss this deadline as well, the tax authorities could impose a fine of R5,000 on you.
If you owe tax, you need to pay a penal interest of 1% per month on the amount due even if you file the return by March 31. The penalty will be charged for every month of the delay since April 2014. Having missed the July 31 deadline last year, you will not be allowed to file a revised return if you make any mistake while filing it by March 31 this year. Also, you cannot carry forward losses when filing the return in March. Delayed filing also means delayed refunds. The earlier you file the return, the quicker you get refunds.
From the above discussion, it’s obvious that the Income-Tax Act, 1961, provides for filing return after the due date, but there are certain points that need to be kept in mind. While the delayed 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 year, whichever is earlier.
ITR 1 — known as Sahaj — is filed by individuals with salary/pension income; or individuals with one house property income; or individuals with income from other sources (excluding lottery income and income from race horses). ITR 2 is filed by any individual who doesn’t satisfy the above conditions, or has exempt income above R5,000; individuals and Hindu Undivided Family (HUF) with 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.
If there is any tax payable, the assessee will need to compute the additional interest liability and deposit the amount before filing the return, otherwise the I-T department could 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 return 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 payable is minimised.
For instance, if a taxpayer has to pay advance tax and he did not meet the deadlines of 30% by September, 60% by December and 100% by 15 March, he will need to pay a penalty. If the advance tax amount paid is less than the compulsory 30% of the total liability by the first deadline (September 15), then 1% simple interest per month on the defaulted amount for three months will be charged. The same penalty will also apply if the taxpayer misses the second deadline of December 15. Missing the last deadline of March 15 will result in 1% interest on the entire defaulted amount for every month until the tax is fully paid.
For returns filed within the due date, any loss is allowed to be carried forward for eight years for set-off against incomes of the future years, subject to certain conditions, and this set-off can help reduce tax liability for the future years.
Latecomers at a disadvantage
* If you miss the March 31 deadline for return filing, the tax authorities could impose a fine of R5,000 on you
* If you owe tax, you need to pay a penal interest of 1% per month on the amount due even if you file the return by March 31
* The penalty will be charged for every month of the delay since April 2014
* Having missed the July 31 deadline last year, you will not be allowed to file a revised return if you make any mistake while filing it by March 31 this year
* You cannot carry forward losses when filing the return in March
* Delayed filing also means delayed refunds. The earlier you file the return, the quicker you get refunds