Belated Income Tax return

As per Sec 139(1) of the Income Tax Act, every assessee is required to file income tax return before the prescribed due date. However, if an assessee fails to file the return before due date, he can file a belated return after the due date under Sec 139(4) of the Act.

Filing of belated return

Belated return can be filed before the completion of the relevant assessment year or the completion of assessment, whichever is earlier.

For instance, the extended deadline for filing ITR of FY 2017-18 was 31 August, 2018. If you failed to file return before 31 August, you can file the belated return by 31 March, 2019 i.e. completion of AY 2018-19.

Late fees u/s 234F

1. If the belated return is filed before 31 December of the relevant assessment year, a penalty of Rs. 5,000 is payable.
2. If the belated return is filed after 31 December of the relevant assessment year (1 Jan- 31 Mar), a late fee of Rs.10, 000 is payable.
3. However, if taxable income of the assessee is less than Rs. 500000, a flat penalty of Rs. 1000 is applicable on filing the belated return by 31 March, 2019.

Interest u/s 234A

If the assessee has any unpaid tax liability, he shall be liable to pay simple interest @1% for a month or a part thereof, for such unpaid tax. It will be calculated from the due date of filing return to the date when it is actually filed.

However, if the assessee does not have any tax liability, interest will not be payable solely on account of filing belated return.

Carry forward of losses

In case of filing a belated return, the assessee will not be allowed to carry forward any loss under the head ‘profits and gains of business or profession’ and ‘capital gains'. However,  he shall be allowed to carry forward loss under the head ‘income from house property’ and unabsorbed depreciation.

Revise belated return

A belated return can also be revised u/s 139(5) of the Income Tax Act. This provision was brought through Finance Act 2016. Thus, belated return filed for FY 2016-17 and onwards can be revised.

File your return now as 31 March is approaching.