This Is What happens When You Miss the Deadline To Fill ITR
It is every taxpayer’s responsibility to file the tax return within the due date specified.
It is important for those who have made cash deposits of over Rs 2 lakh in bank accounts during demonetisation. Reporting such transactions has been made mandatory for Assessment Year 2017-18.
The deadline for filing income tax returns for individuals is upon us. 31 March 2018 is the last date by which one need to file their income tax returns. IT department may also contact you asking you to file your return in time.
Basically, citizens who have linked their Aadhaar with their bank accounts and/or PAN or who has filed a tax return before and is already registered with the Income Tax Department do get an SMS notification from the IT department reminding them to file their ITR.
As the tax compliance is getting tighter, it is better to ensure the filing of tax returns as soon as possible, to avoid any penalty and prosecution proceedings. However, there are occasions when due to certain contingencies the deadline for filing the income tax return might get missed by you and here is what happens.
The IT department calculates the interest on the refund from the start of the assessment year till the date of your refund. Failing to file an ITR will definitely affect these claim refunds on advance taxes paid. This means that you will lose the interest payable to you on the said amount.
But if you somehow are successful to file these returns, the interest will then be calculated from the return filing date. Say you filed your return on July 31, that will shift the calculation date of your interest directly to April 1.
However, if you filed your return on August 1, the calculation will be done from August 1. Basically, what happens is that a loss of even a single day for filing ITR means loss of about four-month of your interest.
One more thing that goes away from your hands is that you no longer will be able to carry forward losses, an exception will still be provided to you in cases of house property.
And also you can’t carry forward losses from capital gains, business income, income from speculation business etc. If you don’t file your return in time even if you have somehow paid the tax in time, your losses will still not be carried forward.
People who are planning to file ITR at the last minute should also note that you will have to pay a penal interest of 1% per month from the due date of return filing till the actual day of filing if you file your return after due date with unpaid tax liability.
This penalty can be accompanied by prosecution by the IT department if the return is filed later than the assessment year and if it exceeds Rs 3,000.