We miss flights, we forget to return important calls… and then some of us miss the tax filing deadline. The reasons may be many. You couldn’t finish filing before the due date. Or you couldn’t figure out a large tax due. The good news is you can still e-file. Here’s what you can do to save the situation.
Pay any taxes due
If you have any tax due, penal interest will start accumulating from 6 August. Interest is applicable on unpaid tax dues under section 234A. This interest is charged at the rate of 1% per month (simple interest) on the outstanding tax amount. It is calculated from the due date of return filing (5 August) till the date that you actually file your return.
If you did not pay advance tax and had your annual tax dues exceed ₹10,000, interest under section 234B and 234C shall also apply. To avoid interest from piling up, pay tax dues and e-file.
Is your filing held up because you can’t understand how certain incomes are taxed? Or you managed to prepare your return but don’t understand a large due. Take professional help.
People in the following scenarios typically end up with tax due when their return is prepared:
- Those who have changed jobs during the year.
- Those who have significant interest income.
- Those who have capital gains income from multiple mutual fund sales or shares sales.
- If you own more than two houses, or have multiple home loans, its best to seek professional advice for your return.
Remember if you are late, you must file accurately, since late returns cannot be revised.
Tax filing has benefits
The Tax Department receives details of large transactions such as mutual funds investments or credit card bills of more than ₹2 lakh, shares of more than ₹1 lakh or if you buy or sell property with value exceeding ₹30 lakh. Why wait for the department to send you a compliance notice? Tax filing of your returns helps you put together a financial track record. This comes in handy when you are applying for loans or visas.
Don’t worry if you have never filed a tax return or have skipped filing for a few years. File your returns now. It’s a myth that the Income Tax Department will send a notice if you file after a gap.
This article was published on The Huffington Post on 10 August 2016.