MUMBAI: Come March 31, the window for filing pending personal income tax (I-T) returns for the past two financial years will be freezed. Hence, taxpayers should ensure they file the returns, as missing the deadline would not only invite notices from authorities, but also steep penalties.All individuals with an annual income of over Rs 2.5 lakh are required to file personal income returns irrespective of whether they fall in the zero income tax bracket or not.
The government has, this fiscal, changed norms pertaining to late filing of returns for the preceding two financial years. It means those who haven’t filed their returns for financial year 2015-16 can do so only till March 31. Once this deadline is missed, you won’t be able to file returns for FY16 without paying penalties.
Officials are given enough powers to issue notices for late filing of income tax returns. The assessing officers are authorised to impose a penalty for the delay based on the individual’s annual income, along with the interest on the outstanding tax. As per the prevailing norms, individuals are charged an interest of one per cent per month on the outstanding tax amount. Interest will be calculated from the due date applicable.
In the past, taxpayers were allowed to file returns for up to two years, but weren’t allowed to revise a belated return. However, for FY17, individuals can revise returns, despite filing late. But filing income returns late implies that taxpayers cannot avail select exemptions and have to carry forward losses. Also, individuals have to pay an additional amount as interest under different sections of the Income Tax Act.
The taxpayers have to be cautious from now on, as the deadlines for filing returns are being squeezed, while the penalties are increased. Going forward, taxpayers get only one year to file the returns instead of two. In other words, for the current fiscal 2017-18, the last date of filing is March 31, 2019.
The government has also increased penalties from the next assessment year. If you don’t file returns for FY18 by July 31, 2019, you will be slapped with a penalty of Rs 5,000 up to December. Delay it beyond December, the penalty would go up to Rs 10,000 until March.