Missed the deadline to file in come tax returns on July 31? Don't feel dejected. You can still file the returns without paying any penalty. Yes, contrary to the perception of many tax payers, there's still enough time to file your returns until March 31, 2015.

However, there will be some implications. In fact, tax payers are allowed to file belated returns for two preceding financial years, even after the deadline. That is, if you have missed the deadline this time, you can complete the process by March 31, 2016, but you might have to pay a penalty of Rs 5,000 if you file returns after March 31, 2015.

"However, if taxpayers are able to demonstrate that they have a reasonable cause for the failure to file tax returns during the assessment year (before March 31, 2015), they can make a case for non-levy of penalty," says Pallavi Bakhru, director of Grand Thornton Advisory, tax consultancy firm.

But it might not be a great idea to postpone the process for another eight months. It is best to complete the exercise as soon as possible, as you will have to pay a penal interest of 1% on the income tax payable, if any, for every month of delay. Besides, timely filing will also result in quicker processing of refunds due to you.

Understand the Implications

The penal interest apart, you may also face some restrictions in terms of claiming benefits. "Many a time, tax-payers make mistakes while filing returns and notice the errors much later. In such cases, the cushion to file revised returns helps. However, this won't be the case if you miss the deadline. You are not allowed to file a revised return if you complete the process after July 31," says Homi Mistry, partner, Deloitte India.

Moreover, if you fail to file returns before the due date, you will have to forgo the benefit of carrying forward losses incurred under the head `Capital Gains' and `Business Losses (other than depreciation loss)'.

"It is imperative for any person who has sustained losses as per s his tax computation in the curl rent year to file his tax return within the time stipulated due date," says Bakhru.

Delayed filing of return could also mean having to let go of interest due on tax refund, if any, from the income tax department.

Tread Cautiously

If you are filing the returns after July 31, you need to take extra care to ensure your return is error-free. Unlike in the case of filing it on time, you will not get an opportunity to rectify your mistakes later. Therefore, before you get started on the process, gather all the relevant documents like Form-16, bank statements, receipts issued by non-government organisations (NGO) or political parties to whom you may have donated money and last year's return.

This will help you verify all the details you would be entering in your income tax return form. You need to run a check over your bank account details in particular, as refunds will be credited to this account. The I-T department has done away with the practice of issuing cheques this year. Finally , if possible, get your return ratified by a tax consultant before submitting it.

Source: ET

Haven't filed tax return? You can do so till 31 March

Many taxpayers see the Income Tax Department as a heartless organisation that is ready to haul them over the coals for the smallest of mistakes. However, there is a soft side to the taxman as well, which is evident from the rules for late filing of tax returns. For instance, if you have missed the deadline for filing your income tax return, there's no need to be worried.

The tax department accepts returns till the end of the assessment year. If all your taxes are paid, you will not be levied a penalty or get a notice for non-filing as long as you file the return for 2012-13 by 31 March 2014. However, if there is some tax to be paid, you will have to give a 1% late payment fee for every month of delay since April 2013. If the tax due is more than Rs 10,000, you should have paid an advance tax. Advance tax is payable in three tranches—30% is to be paid by 15 July of the relevant financial year, 60% by 15 December and 100% by 31 March.

If advance tax has not been paid, the penalty per month will be applicable from the due date of the advance tax. There's even a small window of reprieve for the ultra-lazy taxpayers, who haven't filed their returns for the past two years. They can do so for the income earned in 2011-12 by 31 March 2014. However, this will be treated as a belated return and there could be a `5,000 penalty for late filing depending on the discretion of the assessing officer.

Tax experts say the penalty is rarely slapped if all taxes have been paid. The assessing officer invokes this provision only when there is an additional tax liability. The salaried individuals and retirees, whose income is subject to tax deduction at source, are on dry ground. However, keep in mind that there may be some income on which you have not paid tax. Although there is now a Rs 10,000 deduction on interest earned on savings bank deposits, the income from other bank deposits and infrastructure bonds bought a few years earlier is fully taxable.

Though the tax laws give you a grace period if you file your return late, you also forgo some of your rights as a taxpayer. For one, you cannot modify your tax return if it has been filed after the due date. If you have filed by the due date, you can alter it any number of times before the end of the assessment year, or till the return is assessed. However, after the due date, you are not allowed to change it. So if you miss out on any deduction or exemption, you can't claim it later.

You also cannot carry forward any short-term or long-term losses if you have filed after the due date. The taxpayers, who have filed by the due date, can carry forward capital losses and adjust them against future capital gains. They can also carry forward these losses up to eight financial years. For instance, if you had suffered capital losses in 2012-13, these can be adjusted against gains till 2020-21.

Source: ET