What happens if you missed the income tax return (ITR) filing deadline of 31st July ? How can you ensure you still pay tax to the government without the law catching up with you ?
While an assessee has paid advance tax and TDS (Tax Deducted at Source) by 31st March of every year, 31st July is the last date for filing income tax returns (ITR) as set by the Indian Income Tax department.
Let us see what happens if you miss the deadline and what penalties you might end up paying.
The years in IT lingo
Before we look at the repercussions, let us quickly see how the years are referenced in income tax lingo. There are two terminologies used for the years – one is called Previous Year (PY) and the other is called Assessment Year (AY). Previous Year (PY) is the yar in which income has been earned and Assessment Year (AY) is the year when you are assesing your income for filing income tax returns.
To take an example, if 2009-2010 is the year in which you earned your income, then this will be called Previous Year (PY) while 2010-2011 is called the Assessment Year (AY) as you are assessing your income in 2010-2011 for the Previous Year 2009-2010. Both AY and PY change each year.
If you have no tax liability
If you missed the income tax return (ITR) filing deadline of 31st July, the income tax department gives a reprieve by allowing you to file it after 31st July without any penalty if and only if you file before March 31st 2011 and you have no tax liability to pay to the government. This means that you have all the 12 months of the Assessment Year to file your returns provided your tax liability is zero.
After the first year is over, you have to pay penalties to the tune of Rs 5,000/-. So for this Previous Year, if you do not file income tax returns by 31st March 2011, you will pay a flat penalty of Rs 5,000/-. This penalty can be waived if you have a genuine reason for not having filed your ITR.
So, in case of zero tax liability :
If you have tax liability
What happens if you have a tax liability and have missed the income tax return filing deadline ?
In such a case, you will have to pay 1% per month on the amount of liability starting from August. So, from August of each year, you will pay a penalty of 1% per month on your liability till the time you file your returns. Obviously, if you have a liability and are filing your ITR after the Assessment Year is over, you will pay 1% per month and Rs 5000/- as penalty.
So, in case of tax liability :
Conclusion
Other caveats you need to be aware of if you are filing your ITR after the deadline of 31st July :
Be aware of :
- You cannot carry over/forward losses that you have incurred in this year.
- In case of refund, interest will be calculated from the date you filed your return instead of 1st April.
- You will not be allowed to revise your return in case of mistake in original return.
- In fact, the returns can be filed within two years. So for this Previous Year (2009-2010), you have time till 31st March 2012 to file your returns subject to penalties and some benefits that you lose. If you do not file within these 2 years, you might not be allowed to file it at all.
The conclusion is that, you are better off dead than late to file your income tax returns. I personally know many friends who have got income tax deparment summons to clarify or to provide missing documents and they found the process very harrowing. So if you owe money to the government, you might be better of giving it back to them.
The benefits of filing your ITR in time are huge so don’t delay this important task for later. Do it before the deadlines each year.
Death and the taxman cometh! Both are inevitable.
Very well explained, help me to remove the doubts and fear, Thanks TWWW
Great………… We never knew all these details 🙂
Thanks for the explanation.
I have a query –
Suppose we are about to get returns from income tax that is my employer has paid excessive tax and I need to get the money back from IT. In this case,
Will any penalty be charged or there won’t be any penalty.
Data:
I want to file IT returns for FY 2009 – 2010
@Kamlesh, No penalty for this in my opinion but do reconfirm yourself as well.
Thanks Very useful information
I am having a housing loan from LICHFL for 36lakh .My parent is a Co Borrowrer but sheis my dependent. Therefore the full 100% EMI is been paid by me. My Comapany is giving me a benifit of only 50% exemption rather than 100% inspite of having mentioned in the self declaration that full EMI is paid by me. I am not getting the benifit of 100% exemption though i pay the full EMI. Please advise what steps should I take in order to get the benifit of 100% exemption.
regards
sajeev
@sajeev, Take the full benefit when you file your income tax returns if your company is not giving it.
thanks for this information!
actually, for some unfortunate reason i was late by a day only to file, can in any case my previous losses by carried forward. please reply.
thnks
@ankur, Sorry what is the question ? Some losses do get carried over for sure. I will do an article on them.
i’m sorry. maybe i wasn’t clear before.
the thing is, i was late by a day to file itr for FY 2010-11, in which i had to cover capital loss incurred in FY 2009-10(which was filed on time). so my question is, will that be a problem, since i was late this time.
thanks
Ankur
@Radhey, you mentioned in your article that in case of zero tax liability the penalty can be waived off if there is a genuine reason. Is this true in case there is a tax liability? Would the penalty and interest be waived off if there is a genuine reason? Say for instance person had some emergency at home.
Penalty is waived off if you can show if there was a genuine reason why the return was not filed. It doesn’t matter if there was a tax liability or not.
Hi,
I file my ITR last year (2011-12) and sent it to IT department Bengalore on given address.But i could not get any reply or aknowledge receipt.What should i do now.Do i have to pay penalty? Tax already paid by my company.Pls advice waht to do now….31 march gone..
Thanks…
S.Jamal
How did you file the ITR? There must some sort of acknowledgement you would have got.
You can take the copy of ITR to the IT department and ask them to check.
I have a query.This is my first job and I have income tax deduction of 169rs.
is it compulsory for me to file income tax.
I would imagine no, how much is your taxable salary and how much interest form bank savings account have you received this year ?
@Swati,
If your gross taxable income is less than 5 lakhs and your saving bank interest does not earn more than 10k and you have not taken any home loans nor you have any other source of income, and the deduction of 169 is reflected in your Form16 then you don’t need to file returns.
I sincerely want to pay advance tax with the interest (I did not pay any in the stipulated time) But when I filled challan 280 on 7th Aug 2012 and selected assessment year as 2012-2013 and selected proceed it gives a message that the assessment year should be greater than Financial year. However, the last date for submitting returns has been extended till 31st Aug 2012. Please suggest me how I can pay the advance tax amount with penalty so that I can file my returns before 31st Aug. Kindly suggest how I can proceed in this case.
@Kutty,
Looks like they have not updated their systems with new date. You can consult a CA and pay the tax. It should be easy.
I have filed my tax returns for AY 2012-13, clubbing my wife’s income with mine, as the money in her fixed deposits is really mine. Now my wife has been onformed by the IT department that my wife has not filed her IT returns, and if she has she should send them the acknowledgement.
She doesnot have any other income than the FD interest which has been included in my retruns.
Should I send the acknowledgement of my retruns for their information, or should I file her return with zero income and inform them ?
Please clarify.
You don’t need to file her return.
Hi Wealthwisher ,
Need your kind suggestions for my queries.
I have paid 6000 approx tax for FY 2012-13.I show the rent slips of 84k of the whole year for tax rebate in January at company premises. But as the HRA was of small amount than rent….HRA become the part of tax rebate .
I bought a ready to move flat in January for which I got loan of 19 lacs having dad as co-applicant.I paid two premiums of 19k for Feb and March 2013.I have some questions below:
1)Can I have tax rebate for the year 2012-13?
2)Should I apply for the tax rebate?
3)If yes how much aprox amount will I get after refund and when?
3)I think it will be done through ITR?
4)If yes then What proof do I need to add with ITR.I myself have filled the ITR online for 2012-2013 but missed to send the docs to the specified address.
Regards,
Krishna
Hi, I had already filed my income tax for the FY 2010-2011. While going through my return ITRV now I understand that there has been a mistake and I am eligible for a refund of about INR 5000. My friends tell me that the window time for refiling is over with March 2013. Is there any way I can refile my return for FY 2010-2011 now?
I havefiled my IT returns for the AY 2012-2013 in time, by clubing my wife’s income with mine and also claiming the TDS credit of my wife in my return, and have not filed the return of my wife as she had no income and as had been suggested by you above.
But now the return has been returned under section 143(1) showing only my TDS credit and not showing my wife’s TDS credit, and have been asked to pay additional amount with interest. I was told by tax experts that when I combine my wifes income with mine I can also combine the TDS credits of hers with mine in the return.
What do you suggest I do now ?
Do I have to pay the demand ?
If I have to then can I file my wife’s return now and ask for refund & waiver of panalty.
The last date for filing the reply of 143(1) reassesment is 31st July 2013.
Hi,
No replies have been received for some time now. Can you hurry up as the d date for filing is very near.