What to do if you have not filed your income tax return?

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1. What to do if you have not filed your income tax return?

Many people fail to file their income tax return within the due date as prescribed by the income tax department. But even if you have missed the deadline for filing return, you can still file your income tax return. There is a provision in income tax for late filing of income tax return which is called belated return.

2. What is a belated return?

Filing Income tax return after the due date is called filing a belated return. According to the provisions of law, as it stands today, a belated return can be filed anytime before the end of the relevant Assessment Year (AY).

  • Here is a simple example to understand this better.

A salaried individual has to ideally file his return of income for the AY 2018-19 i.e. Financial Year (FY) 2017-18 on or before 31 July 2018. If he fails to do so, he can file a belated return on or before 31 March 2019.

However, this rule applies only to the AY 2017-18 (introduced in Budget 2016). In respect of returns pertaining to AYs prior to AY 2017-18 i.e. AYs 2016-17 and earlier years, a taxpayer could file a belated return anytime before completion of 1 year from the end of the relevant AY. Therefore, the amendment has effectively reduced the time period by 1 year

  • FY – Is the year in which the income is received
  • AY – Is the year in which the income is assessable to income tax i.e. the year immediately following the FY.

3. Deposited Cash but not Filed Tax returns

A simple one-page return has been prescribed for those with income under Rs 5 lakhs. Since the option is available under the income tax laws to file a belated return, please do avail yourself of it in case you do not file your return before the original due date.  

Not filing a return of income within the original due date would no doubt entail payment of a fee under Section 234F up to Rs 10,000 even if you file a belated return. But not filing even a belated return, could result in receiving an income tax notice.

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Also for those of you who have a refund to be received from the income tax department, please note that filing a return is the only way you can claim the refund from the department. So if you have not filed an original return, please file a belated return to get your refunds.

4. How to File Belated Return?

When you are filing the belated return, the procedure is same as if you file the return on or before the due date.

You need to select ITR form applicable to you and fill the form in the same manner as if you are filing the return on time and Choose the assessment year for which you are filing the belated return for eg if you are filing the return for F.Y 2017-18 select 2018-19 as assessment year

5. Consequences of Late filing of Return

It is always advisable that return should be filed on or before the due date and taxes due should be paid on time otherwise it will have the following consequences:

  • Interest and Later Filing Fees

Till FY 2016-17 if there are any taxes which are unpaid, interest @ 1% per month or part thereof will be charged till the date of payment of taxes. Also, a penalty of Rs 5,000 may be charged. The penalty is not levied in all cases and depends upon the circumstances of the case.

For returns filed from FY 2017-18 and onwards, a late filing fees of Rs 5,000 will be charged for returns filed after due date but before 31st December. If returns are filed after 31st December, a late filing fees of of Rs 10,000 shall apply. However, the fees will be limited to Rs 1,000 for those with an income up to Rs 5 Lakhs.

  • Unable to set off Losses

Losses incurred (other than house property loss) are not allowed to be carried forward to subsequent years to be set off against the future gains in case where return has not been filed within the due date.

6. Conclusion

One must pay taxes and file the return on or before the due date. And in case one is unable to file the return, at least taxes if any should be paid within due date. If all taxes are paid,  interest will not be levied. However other drawbacks such as non carry forward of losses etc will be applicable.

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