When You Miss Income Tax Filing Deadline
Author: Jai Prakash
ITR form While filing your income tax return after the deadline ensure that you file the income tax return under Section 139(4)
Late fee A belated income tax return obviously invites payment of a late fee. How do the late payment fee stack up for this year? Here are some details.
For income tax returns for the financial year 2017-18 or Assessment Year 2018-19, you need to pay late fee of Rs 5,000 if you file a belated return till December 31. The fee is Rs 1,000 for income below Rs 5 lakh. On filing the income tax return after December 31 but before March 31, 2019, you pay a late fee of Rs 10,000. Clearly, missing the income tax filing deadline is costly. But wait! There’s more.
Penal interest payment If you have outstanding income tax payment, you will be required to pay penal interest per month of delay for the period from when your tax became due to the day you file the return. What’s more be prepared to pay more penal interest if the income tax department in its assessment of your income tax returns, finds additional income tax payment due. You need to pay penal interest for this amount too.
No benefit of carryover of capital losses Income tax regulations allow you to carryover capital losses on the sale of assets be it in equities, debt or real estate, for 8 assessment years. This helps you lower your tax on future capital gains since you can set off these losses. However, you lose this benefit when you delay filing your income tax return. So, the damage of belated income tax return can be felt in the long term too.
No window to file revised return When you file income tax return before the deadline, you can file a revised return within 120 days. This opportunity is quite helpful if you have overlooked an error or other details. However, this facility ceases to exist for you when you miss the income tax filing deadline.
One needs to be prepared to absorb some financial damage and withdrawal of some facilities in case of missing the income tax filing deadline. At the same time, it is still important to file the income tax return as soon as possible as further delays will only hurt more.
