In the ideal world, everything happens at the right time. But, in the real world, often, we miss deadlines. There could be several reasons for the delay in meeting deadlines, you are too busy, or plain laziness or it's a simple oversight.
In fact, the deadline for filing your income tax returns (ITR) is 31 July every year. And, for those who simply can't do the necessary paper work by that time and miss this deadline, almost always the income tax department extends this deadline to 31 August.
Deadline extended: A massive power cut that affected half of India's population on 30 and 31 July 2012 forced the IT department to extend your income tax returns filing deadline in assessment year 2012-13 to 31 August 2012. But, if you have not filed your returns for financial year 2011-12 (assessment year 2012-13) you can still do so until 31 March 2013.
Penalty: As per the IT laws if you've missed the July/ August deadline, you get time until 31 March. The good part is that if you do so in the next few days, i.e. by 31 March, you need not pay a penalty. "But if you do miss this 31 March deadline, you might just have to pay Rs 5000 as penalty," said Parag Paranjpe, chartered accountant and certified financial planner, Think Consultants Inc.
What you've missed: Don't be too happy that if you file by 31 March that you are not paying a penalty. That is because you have already paid an opportunity cost by missing the previous deadline. "As per the IT laws, when since you missed your last deadline, you are not permitted to revise your returns, in case you realise there was a mistake in your file in the future," said Paranjpe. If you were smart to have met that July/ August deadline, and afterwards realise that you need to revise your returns, you would have got time until one year from the end of assessment year, or before the assessment is completed, whichever is earlier.
That's not all: You have also missed the opportunity to carry forward losses, since you've missed the July/ August deadline. So, if you have incurred some losses from investing in shares or mutual funds, you could have carried forward the losses for the next eight years, but since you failed the last deadline, you cannot carry forward losses. These are just a few things you cannot do, which is the cost you pay, like it or not, for not meeting the deadline. Don't miss this March deadline, and make matters worse.
Getting credit: "If you don't have any taxes due, you won't be paying a penal interest, but if you've missed the last deadline, you will pay penal interest. But missing this 31 March deadline impacts you qualitatively. Your file will be seen as an indiscipline file, unable to meet financial deadlines," Paranjpe said.
Banks are facing huge non-performing assets. Increasingly, they are looking for quality borrowers, which means they look into your credit report. But if you procrastinate on filing your ITR, you are unnecessarily putting yourself into a tight spot. Non-filing of returns on time may get in the way of you getting a loan in the future. Or at least delay the loan process. Almost all banks these days ask for last three years' income tax returns proofs along with other documents when you apply for a home loan. So, if you delay the returns filing process now, and are looking for a loan in the future, it might unnecessarily cause delay in the loan sanctioning process.
The truth is that filing returns is definitely not a fun thing to do, and is a bitter pill, we are forced to take. So get in touch with your CA, or some online returns filing portal, and get this chore out of your way.
Published Date: Mar 04, 2013 02:53 pm | Updated Date: Dec 21, 2014 01:51 am