Delay in filing income tax return could be costly

By | June 7, 2016

 Income tax return

Delay in filing income tax return

What is the due date of filing Income tax return

Normally due date of filing income tax return is 31st July 2016 for AY 2016-17 ( FY 2015-16) . But in case of certain Assessee it is 30th September 2016 . Read about Due date of filing Income tax Return AY 2016-17 (FY 2015-16)

What is the cost of delaying the income tax return ?

Delay in receiving Income tax refund

If you delay the income tax return , you will delay the income tax refund.

If your refund is due from income tax department , then file the return as soon as possible and claim refund. Return filed first are normally processed first. So take refund on time and enjoy it the way you like !

loss of Interest on Income tax refund

Where return is filed after the due date , interest on refund is paid only for the period from the month of filing the return to the date of refund. thus no interest is paid for the period from April 1 of the assessment year to the date of filing the belated return / return filed after due date

Losses Can not be carried forward in case of delay in filing income tax return

If you file income tax return after due date ​Loss (other than house property loss) cannot be carried forward to future. Thus if in future you earn any profits ,you can not set off losses of previous years in case of delay in filing income tax return of previous years in which loss was incurred.

You cannot carry forward following losses in case you delay filing of income tax return

  • Speculation loss,
  • business loss excluding loss due to unabsorbed depreciation and capital exp on scientific research,
  • short term capital loss ( e.g loss on trading of shares etc in case share sold in one year )
  • long term capital loss .
  • loss due to owning and maintenance of horse races

Exemption/ Deduction not available in case of delay in filing income tax return

Exemptions/deductions under section 10A​, section 10B, 80-IA, 80-IAB, 80-IB, 80-IC , 80-ID and 80-IE are not available.

Not possible to revise return in case of delay in filing income tax return

Return filed after due date is called belated return. In case in future you deduct any mistake in income tax return than Belated return cannot be revised under section 139(5)​.

Notice in case of non filing of income tax return

You will be issued notice u/s 142(1) for non-filing of income tax return if the income tax department.

Interest Charged on non Filing of Income Tax return

Interest u/s 234A at the rate of 1% per month/part of the month would be charged

Penalty for late filing of Income tax return

If income tax return for AY 2016-17 is filed after March 31, 2017 but before March 31, 2018 the Assessing Officer could levy a penalty of Rs 5,000 under section 271F

Prosecution /Jail under Income Tax Act for non filing of Income tax Return

The Income Tax Act provides for prosecution—rigorous imprisonment of three months to seven years and a fine.Section 276CC of the I-T Act enables such prosecution proceedings.

If you haven’t filed your income-tax returns within the statutory deadline or within the time period available after the I-T department issues a notice, it could result in prosecution. In case of a firm or a company, it is persons responsible for the day-to-day conduct of the business—such as partners or directors—who could face prosecution.

The Supreme Cour has also held that in case prosecution proceedings are initiated, taxpayers have to prove the circumstances which prevented them from filing the I-T returns. Which means that the burden is on the taxpayer to prove that the failure to furnish the I-T returns was not wilful.

Concealment Penalty for non filing of Income tax Return

If you do not file return ,and there are assessable income , you are liable to penalty for concealment of income which range from 100% to 300 %.

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