The last day to file your taxes is July 31 (extended to August 5, 2016 for Assessment Year 2016-17). We hope that most of you have filed your taxes by now. A wise man once said that in this world, only two things are certain – Death & Taxes. Both of these entities have a due date. We can’t know and plan for the deadline for the first one, but have you ever wondered what will happen if you miss the deadline for the second.
If you haven’t filed your Income Tax Return for any reason, then don’t take the situation lightly. Failing to file tax return on time can be pernicious. There is a lot to lose if you don’t hurry. Some people have a common misconception that there is nothing to lose if they have paid their taxes on time. Today, we will look at everything which you can possibly, if you squander the chance to file your Income Tax Return on time.
If you made any error in doing your taxes, tax department allows you to file a revised return. However, you cannot file a revised tax return if you filed your original return late. Although the rule pertaining to this has been revised to also give late filers an opportunity to revise returns but it will be effective from 1st April 2017. Hence, it is not applicable for Financial Year 2015-16.
You cannot carry forward your losses if you do not file on time. The main exception to the rule is loss from house property. Even if you have cleared all your tax dues, you aren’t allowed to carry forward your losses if you miss the tax filing deadline.
If you have any taxes due, then filing late can further increase your burden. Taxman will levy a penal interest @ 1% on the taxes due. If you fail to file return even by the end of relevant Assessment year, tax department has the power to initiate prosecution at the drop of a hat if the taxes due are greater than Rs. 3,000. Hence, its better to timely deal with your taxes otherwise your pocket will bear the brunt of your actions.
Did you know that tax department offers interest on refunds due? Currently, Income Tax Department offers interest @ 6% p.a. In case you are expecting a refund, late filing can make you forgo interest on refund which is exempt from tax.
You will be inviting double trouble by not filing your tax return before the end of relevant Assessment Year. Even if you have no taxes due, taxman can impose a penalty of Rs. 5,000 if you cannot show a valid cause for delay in filing taxes.
So, now you know that non-filing or delay in filing can cost you an arm and a leg. Don’t worry! If you are reading this post before the deadline, then you haven’t missed the boat yet. File your taxes now to avoid all the troubles.
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