The saying, “Better late than never” can be applied to many situations in life. However, everything has a time limit and some dues must be made and postponement becomes an option no longer. The government has made considerate concessions for tax payers who have failed to file their tax returns from previous years. However, belated returns of previous years must be filed by March 31st 2018, else risk paying penalties.
Previously, if you had forgotten or failed to file your tax returns with thin the due date of 31st July, you still had two years (from the end of the relevant financial year) to file your belated returns. So, for example if you had not filed your tax return for F.Y. 2015-16, then you would still be able to file till 31st March 2018. However, as per the recent amendment, for returns for F.Y. 2016-17, the deadline for filing your belated tax return is 31st March 2018. The procedure for filing belated returns is the same as filing a regular return, except with the change in assessment year.
If you fail to e-file your return, you may receive an inquiry notice u/s 142(1) or a notice for escaping assessment u/s 148, asking for clarification on the delay in filing and allowed the opportunity to file before the date given in the notice. If, however, you ignore the notice, then you face a penalty of 50% – 200% of the tax payable in addition to the penalty for non-filing.
Moreover, u/s 139(5) you can revise your returns filed earlier within one year of the relevant assessment year. So, for F.Y 2016-17, you can file this return till 31st March 2018 and revise it until 31st 2019.
The penalty for belated returns was Rs 5,000 u/s 271(F). However, after the amendment, for A.Y. 2018-19 the penalty amount for non-filing of belated returns will be Rs 5,000 if filed before December 31st of A.Y and Rs 10,000 if filed between January 1st– March 31st A.Y. For people whose income falls below the taxable income bracket, then the late fee will not cross RS 1,000.
Additionally, if you choose to file your returns late, then the option of carrying forward your losses (except house property) cannot be carried forward to offset future gains.
During the demonetisation time period, individuals who made large deposits will have to file their returns for AY 2017-18. For individuals filing their returns for the first time and whose income falls under Rs 5 lakhs, the Finance Minister has assured that scrutiny notices will not be issued.
If you fail to file your return, you may face receiving a notice, as banks will be reporting all high value deposits during the period along with the relevant PAN numbers. If you fail to file your tax returns for the high value transactions during the demonetisation period, then you risk facing hefty penalties is high.
The saying, “good thing to those who wait”, is not applicable here because further delays in filing of your tax return will result in no good things for those who wait. So, make an appointment with the tax advisers at H&R Block India and get your taxes prepared and filed, effortlessly.