‘By filing a late return you can avoid the consequences of not reporting income.’
‘You can also avoid notice from the IT department for not filing ITR.’

Photo: A person who files tax returns can get benefits such as higher insurance coverage, faster loan processing and visa applications…
Please note that the images are published for illustrative purposes only. Photo: Courtesy Nataliya Vaitkevich/Pexels.com

Taxpayers who missed the July 31, 2022 deadline for filing their returns must file a late tax return (ITR) by December 31.

According to Ankit Jain, partner, Ved Jain & Associates, “This term applies to all types of taxpayers, including individuals, companies, audits and unsupervised.”

Late returns can be filed for the previous year at any time three months before the end of the relevant assessment year, or before the completion of the assessment, whichever is earlier.

Maneet Pal Singh, partner, IP Pasricha & Co, said it “provides an additional opportunity to those taxpayers who missed the deadline due to unavoidable reasons.”

Loss of privilege

Late filing of ITR attracts penalty under section 234F of the Income Tax Act, 1961.

The assessee has to pay a late fee of up to Rs 5,000.

Rs 1,000 for small taxpayers whose taxable income does not exceed Rs 5 lakh.

Penalty interest is levied under sections 234A, 234B and 234C, depending on the type of tax due.

Those who file late returns are also barred from carrying the loss.

Aditya Chopra, partner, Victoriam Legalis-Advocates & Solicitors said, “However, individuals are allowed to carry losses under the head of ‘income from real estate’.

Taxpayers who file late returns do not get the benefit of IT refunds, which are paid at the rate of 0.5 percent per month, if they are filed before the due date ITR is specified.

However, file a late return

Despite the above disadvantages, taxpayers should still proceed with filing their returns.

The IT department can impose penalties on a person who is responsible for filing returns but fails to do so.

Singh said, “By filing returns late, you can avoid the consequences of non-declaration of income. You can also avoid notices from the IT department for not filing ITR .”

If the taxpayer does not file a return, the tax authorities can calculate the taxpayer’s income based on their own estimates. This may be much higher than the taxpayer’s actual income.

Jain said, “If the tax has been deducted from your income, it is still possible to file a return and claim a refund of the excess tax.”

People who file tax returns regularly can get benefits like higher insurance coverage, faster processing of loans and visa applications, etc.

Use co-browsing sites

The IT Department has recently introduced a check-in feature with the e-filing website where helpdesk staff can assist taxpayers in filing their returns.

Pratyush Miglani, Partner, Miglani Verma & Co said, “This enables agencies to provide personalized and real-time support to taxpayers during ITR filing.”

A few days left before December 31, approach your tax advisor to file your late ITR.

Self-employed taxpayers and senior citizens can take the help of IT department agencies.

Singh said, “He can communicate on the screen with the taxpayers during the session if they do not agree to a request.

Something to keep in mind

It is always a good idea to file your ITR on time. But if you don’t do it, set it late and don’t completely forget to send the return.

Be very careful while filing late ITR.

Singh said, “Be careful in choosing the right ITR format. Also, keep all the documents safe while filing the return. Make sure you declare your income correctly, and check all the fields on ‘the full form.”

Late ITR can be updated. However, if you file it at the last moment, you lose the opportunity to file a revised ITR if you find an error later.

So, either apply early or be careful if you’re getting close to December 31st.

Finally, taxpayers who miss this deadline cannot file ITR unless they receive a tax notice from the IT Department.

Feature Presentation: Ashish Narsale/Rediff.com

Source link