Missed the deadline for filing tax returns? Here's what to do

Filing your tax return has become very simple now but a lot of taxpayers still manage to miss the deadline. This year, the last date was extended twice. If you are among the lazy taxpayers who missed the 7 September deadline, there is no need to panic. You can still file your tax return by 31 March 2016.

Though there is no penalty for filing late if all your taxes have been paid, you will miss out on certain rights and privileges that a taxpayer enjoys if he files his return by the due date. For instance, you won't be allowed to modify your tax return if it has been filed after the due date.

If you had filed your return by the due date (7 September), you could have modified your return any number of times before the end of the assessment year (31 March 2016) or till the return is assessed. Any mistake in the form could have been rectified. If you had missed any deduction or exemption, you could have filed a revised return and claimed it.

Late filers also cannot carry forward any short-term or long-term losses. Taxpayers who filed by the due date can carry forward capital losses and adjust them against future capital gains. They can also carry forward these losses up to eight financial years. For instance, if someone suffered capital losses in 2014-15, these can be adjusted against gains made till 2022-23. However, this benefit is gone if the return is filed after the due date.

The tax department even accommodates the uber lazy taxpayers who have not filed their tax return for the previous year (financial year 2013-14). They can still file delayed returns till 31 March 2016. There is no difference in the filing procedure before or after the deadline. But you have to mention that the return is a belated return in the tax form.

This means the tax return for the financial year 2014-15 can be filed till 31 March 2017. However, this will be treated as a belated return. There could also be a Rs 5,000 penalty for late filing (after 31 March 2016) depending on the discretion of the assessing officer.

However, tax experts say the penalty is rarely slapped if all taxes have been paid. The assessing officer invokes that provision only when there is an additional tax liability. For salaried individuals and retirees whose income is subjected to tax deduction at source are on dry ground.

However, keep in mind that there may be some income on which you have not paid tax. Although there is now a Rs 10,000 deduction on interest earned on savings bank deposits under Section 80TTA, the income from other bank deposits and infrastructure bonds bought a few years earlier is fully taxable.

Though the tax authorities are lenient towards lazy taxpayers, there is a price to be paid for missing the deadline. If there is some unpaid tax, the taxpayer will have to pay a 1% late payment fee for every month of delay since April 2015. If the tax due is more than Rs 10,000, the taxpayer should have paid an advance tax. Advance tax is payable in three tranches—30% is to be paid by 15 July of the financial year, 60% by 15 December and 100% by 31 March. If advance tax has not been paid, the penalty per month will be applicable from the due date of the advance tax.

Source : The Economic Times