Three additional days are left for taxpayers to file their income tax returns for this year. Although there are no penalties, individuals are suggested to avoid missing the point in time since the delay could lead on to a loss of cash. The penalty planned for folks missing the deadline doesn’t apply until next year. Therefore it’s not applicable on ITRs filed for the year 2016-17.
If one wants to claim refunds on advance taxes paid or on tax deducted at source, one will lose the interest payable to them by the IT department on the said amount. The IT department calculates the interest on refund from the start of the assessment year i.e. April 1 till the date of granting of refund.
If one files the return on July 31, the interest will be calculated from April 1. However, if they filed the return on August 1, the calculation will be done from August 1, meaning a delay of one day could result in a loss of four-month interest (April-July).
One must pay penal interest of 1 per cent per month from the due date of return filing till the actual day of filing if they file the IT return after due date with unpaid tax liability. The fine can be accompanied by prosecution by the IT department if the return is filed later than the assessment year and if it exceeds Rs 3,000. In case one fails to file tax returns by the end of the assessment year (for financial year 2016-17, assessment year is 2017-18) and has paid all the tax liabilities, the tax department will impose a penalty of Rs 5,000 if one fails to convince them that the delay was justified or due to an unavoidable/uncontrollable circumstance.
It is necessary to report money deposits higher than Rs. 2 lakh during the demonetisation period, that was from November 9, 2016 to December 30, 2016 It’s possible that the IT department might contact one via written correspondence asking them to file their return in time.