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Not yet filed FY16 tax return? HURRY!

March 29, 2018 10:00 IST

Not yet filed FY16 tax return? HURRY!

Miss the March 31, 2018, deadline to file belated tax return for FY16, and risk an I-T notice and a hefty fine. Tinesh Bhasin reports.

As the government has changed rules on filing belated returns in two different Budgets (2017-18 and 2016-17), the deadlines can get confusing. For those who have not filed their returns for the financial (FY) 2015-16, they have a window of opportunity to do so by March 31, 2018.

 

Taxpayers will not be able to file returns for FY16 once they pass this deadline.

Latecomers should ensure that they meet the deadline, failing which there can be consequences.

"The tax authorities can issue a notice and ask the individual to file his tax return. The assessee will need to pay a penalty for the delay along with interest on the tax outstanding," says Naveen Wadhwa, general manager, Taxmann.com.

An assessing officer also has the power to take a call on an individual's possible income based on relevant facts and raise a tax demand, if returns are not filed despite a notice.

In the 2016-17 Budget, the government slightly relaxed filing norms. Just like earlier, a taxpayer got up to two years to file returns. But for FY17, the individual can also revise returns, despite filing late.

Earlier, the norms didn't allow revising of belated returns. If you haven't filed returns for FY17, the last date to do it is March 31, 2019.

Belated filing has its own drawbacks. Not only do you lose the opportunity to avail of select exemptions and carry forward losses (other than house property loss), you may have to shell out extra as interest under different sections of the Income Tax Act.

You will also be charged an interest of one per cent per month (simple interest) on the tax amount outstanding. This interest will be calculated from the due date applicable.

The mere fact that a salaried taxpayer's tax liability has been discharged by ways of Tax deduction at source (TDS) by his employer does not spare him from the return filing mandate.

"Any excess TDS can be claimed as refund only by filing of return of income. Any additional income apart from salary income on which taxes have to be paid have to be disclosed by filing a return of income else it will amount to under reporting of income and the taxpayer can be subject to levy of penalty. Same goes for business owners," says Archit Gupta, Founder and CEO, ClearTax.

Going forward, however, the taxpayer gets only one year to file his returns instead of two. For filing returns of 2017-18, the last date of filing is March 31, 2019.

"Taxpayers now need to be cautious with their tax filings as the deadlines have been squeezed and penalties have been hiked," says the partner of a tax consulting firm.

Individuals with an income of more than Rs 250,000 are mandatorily required to file income tax returns.

Tax experts point out that from the next assessment year (AY) (2018-19), the government has also hiked penalties, which increases with the delay.

For FY18, if you don't file returns by July 31, 2018, you will be charged a penalty of Rs 5,000 up to December. If you delay it beyond December, the penalty increases to Rs 10,000 until March.

Tax experts said the income tax department is actively pursuing individuals who have not filed their returns, especially after a large number of notices were sent to those who deposited more than Rs 200,000 during demonetisation.

This year onwards, assessees are receiving messages for the first time, asking them to go to the "compliance portal" and provide reasons for not filing returns.

"There would be a whole lot of taxpayers who would have made cash deposits during demonetisation but would have not filed their returns for the relevant AY, that is, AY 2017-18. Therefore, March 31, 2018, for such taxpayers, is crucial in as much as this is the last and final opportunity for them to disclose their sources of income, pay taxes on the same and come clean," says Gupta.

Photograph: eFile989/Creative Commons.

Tinesh Bhasin
Source: source image