Meeting that deadline will allow you to claim refund on excess tax deducted
Taxpayers who missed the July 31, 2022 deadline for filing their return must file a belated income-tax return (ITR) by December 31.
According to Ankit Jain, partner, Ved Jain & Associates, “This deadline applies to all types of taxpayers, including individual, corporate, audit, and non-audit.”
A belated return can be filed for the previous year any time three months prior to the expiry of the relevant assessment year, or before completion of assessment, whichever is earlier.
Maneet Pal Singh, partner, IP Pasricha & Co, says, “It provides an additional opportunity to those taxpayers who missed the deadline due to an unavoidable reason.”
Filing a belated ITR attracts penalties under Section 234F of the Income-Tax (I-T) Act, 1961. Assessees have to pay a late filing fee of up to Rs 5,000. The fine is Rs 1,000 for small taxpayers whose taxable income doesn’t exceed Rs 5 lakh.
Penal interest is levied under Sections 234A, 234B and 234C, depending on the type of tax due.
Those who file belated returns are also barred from carrying forward their losses. Aditya Chopra, managing partner, Victoriam Legalis-Advocates & Solicitors says, “However, individuals are allowed to carry forward losses under the head ‘Income from House Property’.
Taxpayers who file a belated return are ineligible for interest on I-T refund, which is payable at the rate of 0.5 per cent per month, if the ITR is filed before the due date.
Nonetheless, file a belated return
Despite the above-mentioned downsides, taxpayers should still go ahead and file a belated return. The I-T Department can impose a penalty on a person who is liable to file a return but doesn’t do so. Singh says, “By filing a belated return, you can avoid the consequences of non-disclosure of income. You can also avoid a notice from the I-T Department for not filing an ITR.”
If the taxpayer doesn’t file a return, the tax department can calculate the taxpayer’s income based on its own assessment. This could be much higher than the taxpayer’s actual income.
Jain says, “If taxes have been deducted from your income, it is still possible to file a belated return and claim a refund of the excess taxes deducted.”
A person who files tax returns regularly can avail benefits such as higher life insurance coverage, faster processing of loan and visa application, and so on.
Utilise the co-browsing facility
The I-T Department recently introduced a co-browsing feature on the e-filing website that allows helpdesk agents to assist taxpayers file their returns. Pratyush Miglani, managing partner, Miglani Verma & Co says, “This allows agents to provide personalised and real-time support to taxpayers while filing an ITR.”
With only two weeks left before December 31, approach your tax consultant to file your belated ITR. Do-it-yourself (DIY) taxpayers and senior citizens can take the help of the I-T Department’s agents. Singh says, “They can connect with the taxpayer’s screen for a session only when the latter approves a request. The agents can’t see any other data on the taxpayer’s computer.”
Things to keep in mind
It is always advisable to file ITR on time. But if you fail to do so, then file a belated instead of skipping the filing of return altogether.
Exercise a lot of caution while filing a belated ITR. Singh says, “Be cautious about selecting the right ITR form. Also, keep all the documents handy while filing the return. Ensure that you disclose your income accurately, and cross-check every field in the pre-filled form.”
A belated ITR can be revised. However, if you file it at the last moment, then you miss out on the chance to file a revised ITR if you discover a mistake later. Hence, either file early or be extra careful if you file close to December 31.
Finally, taxpayers who miss this deadline will not be able to file an ITR unless they receive a tax notice from the I-T Department.
How to pay late filing fee
- Deposit the late filing fee before you begin filing your ITR
- Use challan number 280 to pay the late filing fee or penalty
- Once you have filled in the form and made the payment online on the NSDL website, file the return
- You will get a receipt or challan from the bank if you make the payment in person at a branch