The deadline for filing Income Tax Returns for salaried individuals has recently passed. If you are one of those people who have missed the 31st July deadline for filing taxes, then don’t fret, you may still be able to file your late IT returns with zero penalties.
The website of the Income Tax Department of India says that, ‘a tax return may be furnished any time before the expiry of two years from the end of the financial year in which the income was earned’. This means that if you earned your income during FY 2008-09, you may file a belated return anytime before 31st March, 2011. Of course, you may lose certain benefits available to those who file their returns on time, but it is better to file them late than never...
All late income tax returns filed after 31st July, 2009 are termed as a ‘belated return’. People who have zero net tax payable are lucky. If you file your late income tax return before the end of the current financial year, that is, 31st March, 2010 and all your taxes are paid, then no penalty or interest will be imposed on you. However, you may forego some of your rights as a taxpayer, such as:
- You will not be able to carry forward your losses.
- You cannot claim a tax refund.
- You cannot revise your return.
If you still have some tax dues, while filing the delayed income tax return, then you will be charged one per cent interest per month on the outstanding tax payable amount from March 2009. Partial months are considered to be full months.
Those who miss the 31st March, 2010 deadline may still file their belated tax returns within the next financial year. The Income Tax Department will accept late returns till 31st March, 2011 with a late filing penalty of Rs.5000. This means you would have to pay one percent interest per month on the outstanding tax payable amount plus a penalty of Rs.5000.
One of the main advantages of filing Income Tax Returns is that it is useful while applying for loans. Whether you need a housing loan, vehicle loan or a loan for any other purpose, most loan managers at banks will always ask for the Income Tax Returns of the past 2 years, as proof of your financial ability. If you are planning to take a loan in the future, either for yourself or your loved ones, then filing of income tax returns, even belated, is a necessity.