While the government has extended the last date for filing income tax returns to August 5 because of some technical glitches, if an assessee still misses the deadline, it does not mean that he cannot file his tax returns for the assessment year 2017-18. However, if an assessee misses the deadline he will not be allowed to file a revised return. He cannot carry forward losses when filing the tax returns late. Also, in addition to paying any unpaid tax, the assessee will have to pay interest on any tax that had not been paid. Delayed filing also means delayed refunds. The process of filing a belated returns online is the same as when one files returns before the due date except that one has to select “Return filed under section 139(4)” in the dropdown menu. If an individual files returns within the due date, any loss is allowed to be carried forward for eight years for set-off against incomes of the future years. This set-off can help reduce tax liability for the future years. Till when can one file. For assessment year 2017-18 (financial year 2016-17), an assessee can file belated returns till March 2018. There will be no penalty for filing belated income tax return after due date for financial year 2016-17 till March 31, 2018.
However, in this year’s Budget, the government had introduced a maximum late fee of Rs 10,000 for delayed filing of income tax returns. This will be applicable from April 1, 2018 and will not apply for returns filed for FY2016-17. For income below RS 5 lakh, filing returns after July 31 will attract a fine of Rs 1,000, while for income above Rs 5 lakh it will be Rs 5,000 if it is filed after the due date but on or before December 31 of the assessment year. Since it is a fee, it has to be paid while filing tax returns along with any tax on any income and interest.
If one delays filing returns and in case there is any tax due on March 31 of the financial year, then the assessee will be liable to pay an additional interest under section 234A at the rate of 1% per month on that amount. Even if you file a belated return, it is advisable to deposit the outstanding tax liability at the earliest so that the interest payable is minimised. So, it makes sense to file returns on time to avoid paying the additional interest. The Union Budget has reduced the time limit for completion of assessment under Section 153 of the I-T Act.
In assessment year 2018-19, it will be 18 months from the end of the assessment year. From assessment year 2019-20, it will be 12 months from the end of the assessment year. It has also reduced the time limit for completion of re-assessment. In respect of notices served under Section 148 of the I-T Act on or after April 1, 2019, the time limit for completion of assessment or re-assessment will be 12 months from the end of the financial year in which the notice is served.
Under Section 139(5) of the Income Tax Act, an assessee can file revised return within two years from the end of the relevant fiscal year or before the completion of assessment by tax authorities, whichever is earlier. The Finance Act of 2017 reduced the time limit for filing such revised return to one year from the end of relevant fiscal year or before the completion of the assessment by tax authorities, whichever is earlier. This amendment will be effective from fiscal year 2017-18. A revised return can be filed if the assessee has filed the return within the due date. For filing the revised return, one has to enter the acknowledgment number and the date of filing of the original return in the revised form.