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For crores of taxpayers of the country, this is the time to be extremely cautious and fulfill their financial responsibilities on priority. Now only 72 hours i.e. 3 days are left for the last date to file Income Tax Return (ITR) for ordinary individual taxpayers, salaried employees and unaudited small traders. The Income Tax Department has clarified that no new announcement will be made regarding the extension of the last date, hence taxpayers should complete their return process immediately to avoid any last-minute technical glitch or server down problem.
Like every year, in the last days, there is huge traffic pressure due to lakhs of users logging in simultaneously on the Income Tax e-filing portal. Due to this, you may have to face problems like delay in receiving OTP, failure of payment gateway or non-submission of the form. If you do not file your tax return within the stipulated time frame, you may not only have to pay thousands of rupees of fine from your pocket but may also lose out on many important financial rights and deductions.
If a taxpayer fails to file his income tax return by the prescribed due date, the Income Tax Act Section 234F Under this, late filing fee is automatically applied. This penalty is divided into two categories based on the annual total taxable income of the taxpayer:
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Penalty of ₹5,000 on income above ₹5 lakh: If the total net taxable income of a taxpayer is more than ₹ 5,00,000, then it is mandatory for him to file the belated return after the deadline. ₹5,000 Late fee challan will have to be paid.
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Relief of ₹1,000 on income up to ₹5 lakh: Providing relief to small and medium taxpayers, the law provides that if the total income is ₹ 5,00,000 or less, they can only ₹1,000 Late fee will be collected.
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Rules for those with income below the basic exemption limit: If an individual’s gross total income is less than the basic income tax exemption limit (₹2.5 lakh in the old tax regime and ₹3 lakh in the new tax regime), then no late fee under section 234F is applicable on them, even if they file their return after the deadline. However, if they are filing returns for expenditure over ₹2 lakh on foreign travel, electricity bill payments over ₹1 lakh or claiming any TDS refund, timely filing is considered mandatory.
Most people think that the only disadvantage of not filing returns on time is only the penalty of ₹5,000, whereas the reality is that delaying causes you to suffer huge financial losses at many levels:
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1% monthly interest under section 234A: If you are liable to pay any outstanding tax (Self-Assessment Tax) and you have not filed the return by the due date, the amount of outstanding tax will be assessed from the day following the due date till the date of actual payment. 1% per month Simple interest at the rate of 1% (or full 1% for any part of the month) will be charged.
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Right to Carry Forward of Losses abolished: There is a legal right to set-off losses incurred in stock market trading (Intraday, F&O, Short-Term Capital Loss), mutual funds or non-speculative business losses against profits for up to 8 future years only if the return is filed before the due date. After missing the deadline, only ‘house property loss’ is allowed to be carried forward, all other losses lapse forever.
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Delay in Tax Refund and Loss of Interest: If your TDS has been over deducted and you are entitled to a tax refund, your refund will get stuck for months due to late filing. Also, the taxpayer has to suffer financial loss in calculating the interest on refund received under Section 244A.
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Obstacles in loan and visa applications: While applying for home loan, car loan, personal loan or any foreign visa (especially US, UK, Canada, Europe) banks and embassies ask for timely filed ITR receipt (ITR-V) of last 2 to 3 years. Belated or late filed ITRs are viewed with suspicion by financial institutions.
If due to some unavoidable reason you are not able to file your return in the next 3 days, the Income Tax Law definitely gives you a second chance, which is called ‘Billeted Return’:
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Belated Return – Section 139(4) : You are of the relevant assessment year 31st December You can file your belated return by paying late fees and interest up to Rs. After the date of 31st December passes, the way of filing regular returns for that year through the common portal is completely closed.
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Revised Return – Section 139(5): If you have filed your return on time and later notice a mistake or missed income, you can revise it as many times as you like without any additional penalty till December 31. But if you have filed a belated return for the first time, then the options to correct the mistakes in it become quite limited.
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Updated Return (ITR-U): After December 31, the only option left is to file ITR-U under Section 139(8A), in which the taxpayer has to pay a heavy additional tax of 25% to 50% along with the outstanding tax as penalty and no fresh refund or loss can be claimed in it.
In the last few days, many people directly fill the form and submit it, due to which later notices of defective return and mismatch come from the Income Tax Department under Section 143(1) or 139(9). Before filing the return, download and check these three primary documents from the e-filing portal:
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Form 26AS (Tax Credit Statement): It contains complete details of TDS and TCS deducted by employers, banks, buyers on your PAN. Make sure that the amount of TDS you are claiming in the return is fully credited in 26AS.
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Annual Information Statement (AIS): AIS contains detailed records of all high-value transactions linked to your PAN such as interest received from bank accounts, buying and selling of shares and mutual funds, heavy credit card bill payments, foreign exchange purchases and dividend income.
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Taxpayer Information Summary (TIS): This is a simplified and summary form of AIS, which gives a summary of your total income under different categories. Only after seeing this, select your correct ITR form.
If your source of income is simple, you can file your return from the official portal of Income Tax Department in just a few easy steps, even without a CA or agent:
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Step 1 (Log-in): First of all go to the official portal of Income Tax Department (eportal.incometax.gov.in). Log in by entering your PAN card number (user ID) and password.
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Step 2 (Filing Option): Click on ‘e-File’ in the main menu on the dashboard, then select ‘Income Tax Returns’ and then ‘File Income Tax Return’ option.
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Step 3 (Assessment Year and Mode): Select the respective assessment year. Select ‘Online (Recommended)’ in the filing mode and tick the ‘Individual’ option.
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Step 4 (Choosing the correct ITR form): If you are salaried, have income from a house property and total earning is up to ₹50 lakh, ITR-1 (Sahaj) Select. If there is share trading or capital gain, ITR-2 And if there is business/profession then ITR-3 or ITR-4 (Sugam) Select.
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Step 5 (Data Verification and Tax Payment): Most of the data (salary, interest, TDS) will come pre-filled on the portal. Match it with your documents. If any tax liability arises, make online payment through e-Pay Tax and submit the return.
Often, after submitting the form, taxpayers assume that their work is complete, whereas as per Income Tax rules, the return filled without verification is considered completely invalid (Invalid/Null & Void). After submitting the form within 30 days E-Verify is legally mandatory.
Easiest methods of e-verification:
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Aadhaar OTP: Complete the verification instantly in 10 seconds through 6 digit OTP received on the registered mobile number linked to Aadhaar.
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Net Banking/Bank Account EVC: Authenticate directly to the e-filing portal by logging in to your net banking account or generate an Electronic Verification Code (EVC) from a pre-validated bank account.
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Sending with physical signature: If digital mode does not work, take a print out of the ITR-V Acknowledgment Receipt, sign it in blue ink and send it through ordinary post or speed post to ‘Centralized Processing Center (CPC), Income Tax Department, Bengaluru – 560500’.
Only 3 days are left. File your income tax return today to avoid any unexpected financial penalties, legal complications and mental stress and maintain your financial credentials as a responsible citizen of your country.