The deadline to file income tax returns is past us. 5th August was the last date to file returns for AY2016-17 (FY2015-16). As is typically the case, a lot of individuals e-filed their returns in the last couple of weeks before the extended deadline. The Income Tax Department has also reported record e-filing numbers for this tax season.
The tax department sends out reminders periodically to taxpayers for filing their returns. There is a lot of coverage about the same in the media as well. Even then, there are a lot of taxpayers who would have missed the tax-filing deadline. If you’re one of them, you would have missed the benefits of filing on time. However, all is not lost. You can still file your tax returns for AY2016-17 till the end of the 2018 financial year. Remember that you have to compulsorily e-file your tax returns if your annual income is Rs 5 lakh or more.
A tax return that is filed after the initial deadline is called a belated return. And you shouldn’t procrastinate filing a belated return anymore. The primary reason for that being penal interest. The Income Tax Department levies simple interest on the tax you have due. This interest starts from the 6th of August till the date you pay the tax, and is charged at a flat rate of 1% a month under Section 234A. When the interest on the tax due is calculated, a part of a month is considered as a whole month. Hence, the sooner you file your tax returns, the lesser interest you will have to pay. Additionally, the sooner you file, the sooner you will get your income tax refund as well.
One thing that you will have to make sure when you e-file your taxes after the deadline is the accuracy of the returns. The advantage of filing before the deadline is that you can revise your returns any time you want. This revision facility is not available on returns that have been filed after the deadline. Hence, ensure that there are no errors in the returns that you file now. If the tax department notifies you about a mistake in your belated return, you may be asked to pay a fine.
Apart from this, you should e-file now so that you have your financial records in order. Your IT return is an important document, even when you don’t have taxable income. The returns can be used as a document at the time of applying for a loan or a visa. Filing returns also ensures that you don’t get a notice from the tax department, especially if you have high-value transactions.
All said and done, you can e-file your tax returns even if you have missed the deadline. There are certain advantages of filing within the deadline that you have missed out on, but don’t delay any further. And remember that the process doesn’t end with filing your returns, you need to verify them as well. The verification can be done electronically or by sending a physical copy to CPC, Bangalore. Make sure you verify properly as well.
This article was published in Deccan Herald on 15 August 2016.