From Outlook money
31 July is gone and you are yet to file your tax return? here's what you can still do
All Is Not Lost, Yet
Business loss
If you are running your own business, it's important that you adhere to the due date. Says Manoj Yadav, co-founder, www.taxspanner.com, an online tax filing portal: "All losses are allowed to be carried forward to the next year only if return is filed by July 31. Exception to this is loss under the head of house property. Unabsorbed depreciation can also be carried forward.”
Tax not paid
The process gets expensive for those who haven't paid their taxes and also skipped the due date for filing returns. Three types of interests are attracted in such a case:Interest for not furnishing tax return (Section 234A). If you file the return of income for the assessment year (AY) after the due date, you can get off by paying simple interest at the rate of 1 per cent for every month, starting from the day after the due date. Interest is calculated on the amount of the tax on the total income, after adjusting for TDS.
Advance tax not paid. Does your tax liability for the AY exceed Rs 10,000? If yes, then you must have paid tax in advance. If you haven't, and missed the deadline for filing the return too, two types of interest apply. First, you have to pay interest under Section 234B. This section is attracted when an assessee who is liable to pay advance tax has failed to pay such tax or, when the advance tax paid is less than 90 per cent of the assessed tax. Section 234C is also attracted for having deferred the payment of the advance tax.
Long due. Are you one of those who have not filed their returns for a long time, say five years. Tax laws recognise only the returns filed for the preceding two assessment years as valid. We are now in 2010-11. Hence, returns filed for AY 2008-09 and 2009-10 only will be valid, though there is nothing that actually prevents you from filing returns for the previous years. “If the IT department decides to open the assessment for those previous years, you may inform them that you have now filed the returns. The department may either accept it or insist that you file it again,” says T.G. Suresh, a Chennai-based tax practitioner. As he suggests, you can file returns for the previous two assessment years and file the returns of the years preceding them whenever called for.
E-filing
Paperless filing is possible even in case of belated returns. But you must do so before 31 March 2011. A belated return cannot be revised. Says Mamtha Banerjee, founder & CEO, www.investmentyogi.com, a personal finance website: “You need to pay more attention while e-filing after the due date. Adhere to the checklist carefully. Ensure all the data given is correct."
hamsini AT outlookindia.com
- Haven’t filed your return by 31 July? You have time till 31 March to do so.
- The extra time, however, doesn’t come for free. If tax hasn’t been paid before 31 July, you need to pay interest under Section 234A of the Income Tax Act.
- Is your tax liability Rs 10,000 or more? Then, you must have paid advance tax. If you haven’t, along with the interest under Section 234A, you also need to pay interest under Sections 234B and C.
- Business loss or any other loss cannot be carried forward since you are filing a late return; only loss from house property and absorbed depreciation can be carried forward.
- Late returns cannot be revised. So, be very careful while providing information.
- You can e-file late returns. Last date to e-file is 31 March 2011.
- If returns aren’t filed by 31 March, a penalty of Rs. 5,000 could be levied on you.
***
Life is no less taxing without the necessity to pay taxes. But when you can't escape it, why not be a little prompt to avoid any pain in the future? If your income is already subject to tax deducted at source (TDS), the necessity to pay tax doesn't arise. In such a case, you are excused if you don’t file your return on 31 July. But make sure you do it by end of the current fiscal year, i.e., 31 March 2011. There is a possibility of the income tax department levying a penalty of Rs 5,000 if you fail to do so. If TDS has been deducted at a higher rate, or tax has been deducted without providing for Chapter VI-A deductions or other deductions such as interest on housing loan, you may also be eligible for tax refund. Here again, the second deadline is 31 March.Business loss
If you are running your own business, it's important that you adhere to the due date. Says Manoj Yadav, co-founder, www.taxspanner.com, an online tax filing portal: "All losses are allowed to be carried forward to the next year only if return is filed by July 31. Exception to this is loss under the head of house property. Unabsorbed depreciation can also be carried forward.”
Tax not paid
The process gets expensive for those who haven't paid their taxes and also skipped the due date for filing returns. Three types of interests are attracted in such a case:Interest for not furnishing tax return (Section 234A). If you file the return of income for the assessment year (AY) after the due date, you can get off by paying simple interest at the rate of 1 per cent for every month, starting from the day after the due date. Interest is calculated on the amount of the tax on the total income, after adjusting for TDS.
Advance tax not paid. Does your tax liability for the AY exceed Rs 10,000? If yes, then you must have paid tax in advance. If you haven't, and missed the deadline for filing the return too, two types of interest apply. First, you have to pay interest under Section 234B. This section is attracted when an assessee who is liable to pay advance tax has failed to pay such tax or, when the advance tax paid is less than 90 per cent of the assessed tax. Section 234C is also attracted for having deferred the payment of the advance tax.
Long due. Are you one of those who have not filed their returns for a long time, say five years. Tax laws recognise only the returns filed for the preceding two assessment years as valid. We are now in 2010-11. Hence, returns filed for AY 2008-09 and 2009-10 only will be valid, though there is nothing that actually prevents you from filing returns for the previous years. “If the IT department decides to open the assessment for those previous years, you may inform them that you have now filed the returns. The department may either accept it or insist that you file it again,” says T.G. Suresh, a Chennai-based tax practitioner. As he suggests, you can file returns for the previous two assessment years and file the returns of the years preceding them whenever called for.
E-filing
Paperless filing is possible even in case of belated returns. But you must do so before 31 March 2011. A belated return cannot be revised. Says Mamtha Banerjee, founder & CEO, www.investmentyogi.com, a personal finance website: “You need to pay more attention while e-filing after the due date. Adhere to the checklist carefully. Ensure all the data given is correct."
hamsini AT outlookindia.com
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