Every person whose gross total income exceeds the taxable limit is liable to file income tax return (ITR). Therefore, if your income is over Rs 2.5 lakh, then it is compulsory for you to file your income tax return in India. However, in one financial year you can file your income tax returns for the previous two financial years only.
For example, “in the FY 2017-18, up till 31st March 2018, you can file return for the previous two financial years – 2016-17 and 2015-16. However, this process will change when you file your returns in the FY2018-19 as you will be allowed to file returns for FY 2017-18 only and not any other previous year,” says Chetan Chandak, Head of Tax Research, H&R Block India.
To explain it further, income tax returns for a financial year must be filed by the 31st of July of the next financial year. For example, income tax returns of Finacial Year 2016-17, that ended on March 31, 2017, will be due on 31st July 2017. In one financial year, you can file your IT returns for the previous two financial years. To instance, in the financial year 2016-17, up to March 31, 2017, you can file return for the previous two financial years – 2015-16 and 2014-15.
“From FY 2018-19, tax returns for the previous financial year can only be filed because the time period to file belated return or revised return has been reduced to one year from the end of the relevant assessment year to one year from the end of the relevant financial year. For example, return for FY 2016-17 can be filed or revised till 31.03.2018 only,” says Archit Gupta, Founder and CEO, ClearTax.in.
However, delayed filing has its own drawbacks:
# Penal interest may be applicable under section 234A, 234B and 234C.
# Delayed returns cannot be revised. (From FY 2016-17, belated return can also be revised).
# You will not be allowed to carry forward some losses that belong to the years for which returns were not filed.
In case you have received a notice from the I-T Department asking you to file your returns which go beyond 2 financial years, then you should prepare your return and submit it to the Income Tax Office in your ward. Usually old returns are filed as a response to an income tax notice.