Surjeet Oberoi from Ludhiana missed the last date for filing his income tax returns due to some untoward incident, "I was unable to file my returns before the due date. Can I still file my returns? If yes, what is the penalty?"
Surprisingly, when it comes to missing the last date of returns, income tax rules aren't so complicated after all. A person filing returns may fall under any one of the categories given below.
Moneycontrol spoke to experts to find out how to deal with your delayed tax returns under each of categories.
1. You don't have to pay any tax because all the necessary tax has been deducted at source.
You would fall under this category if your only source of income is your salary income. In such case, your employer is under an obligation to deduct the necessary tax at source from your income. You would not have to pay any tax over and above that.
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Primer on filing returns |
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Income tax returns for individuals must always be filed before the next year's July 31. That means, your income tax return for the income earned during April 2005 to March 2006 will have to be filed before the 31st of July 2006. The period from April 2005 to March 2006 is referred to as the 'previous year' and the year during which you file your returns, which in this case is 2006-2007 is referred to as 'assessment year.' The tax authorities can extend the last date for filing return if they feel it is necessary to do so. However, this year the due date was not extended. |
If you fall under this category and have missed the last date for filing your returns, there is little to worry. All you have to do is to file your returns before March 31, 2007. You will not have to pay any penalty or interest for the delayed period. However, complete non-filing of return even till 31st March 2007 can attract a penalty of Rs 5,000.
2. You have to pay tax
If you have to pay tax, over and above what your employer has deducted, then you will have to pay penal interest. If you have rental income or income from running your own business or professional service, then the question of tax deduction at source does not arise.
For instance, if you have given your house on rent, your tenant is under no obligation to deduct tax before paying you the rent amount. In such case, you would have to pay your taxes at the time of filing your return.
If you do have such a tax liability and have missed the last date for filing the tax returns then you are in for a penal interest.
Says tax expert Subhash Lakhotia, "In such a case, you must calculate penal interest on the tax amount due, at the rate of 1% per month for every month of delay. For example, if your tax payable is Rs 1,000 and you are late by a month, you will have to pay a penal interest of Rs 10."
He also advices, "I suggest you don't delay filing your return till the next year as in that case a penalty could be levied."
If you are among those who have failed to file your return by the due date, all is not lost. You can still file your return by paying a penal interest is necessary and set your record straight.
Lakhotia gives a word of wisdom, "The income tax department does not give any pardon to anyone who fails to file his return. Whether your case is genuine or not is not considered. If you have not got all your documents on time, it is advisable to file your return and submit the documents at a later date."
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