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Anand

Wednesday, August 14, 2013

Have You Missed The Tax Filing Deadline?


Have you missed the tax filing deadline set up by the Income Tax Department of India? Are you worried about it and are not sure what to do next? Then, this article is just for you. You could've been sick or had to travel on an urgent business trip or in the worst case were just lazy to finish the formalities on time. Whatever be the reason, missing to file your tax returns by the deadline is not a good idea and you will have implications which could leave a hole in your wallet.

So, what was the deadline for filing the tax returns for the previous financial year - April 2012 to March 2013?

The original deadline was 31st July 2013. The IT Department extended it until 5th of August 2013 to help the last minute filings to complete without any penalties.

If you are someone who has not filed his/her tax returns yet, you will fall under either of the 3 below groups:

Group 1: I have No Tax Liability
Group 2: I will get a Tax Refund
Group 3: I have Outstanding Tax Liability

Let us see the implications on you if you fall in either of the above 3 groups...


Group 1: I have No Tax Liability

You are someone who has already paid all your tax dues for the previous financial year or your company has already deducted sufficient TDS from your salary to cover for your tax liabilities for the previous year. So, technically you don’t owe the IT Department any money.

Impact of not filing by deadline:

The income tax return for any assessment year can be filed till the end of that assessment year without any penalty. If it is filed after the end of the assessment year, there is a lump sum penalty of Rs. 5,000. So, you have time until March 2014 to file the tax returns for the financial year that ended on March 31st 2013. If you miss this deadline, you will need to shell out 5000 rupees from your pocket in order to file your tax returns.


Group 2: I have to get a Tax Refund

You are someone who has already paid more than sufficient money to cover for your tax liability for the previous year or your company has already deducted surplus TDS from your salary. Effectively, the IT department owes you money. They will refund the surplus money to you, as soon as you file your tax returns...

Impact of not filing by deadline:

There is absolutely no impact here. You can file your returns anytime you want. The only drawback here is that, the surplus money that the IT Department has will only be refunded to you after your Tax Returns is processed. So, if you are in no hurry to get your tax refunds, you can take as much time as you want. However, returns that are filed at odd times usually take much longer time to process when compared to those that are filed during the peak tax filing season...

Group 3: I have Outstanding Tax Liability

You are someone who is yet to pay his/her full tax liability to the Tax Department. This could be due to additional sources of income like "Rental Income" or you could be a businessman or a trader who is yet to complete calculating your accounts. Whatever be the reason, you fall in the group that has the most impact.

Impact of not filing by deadline:

Just like group 1, you can file your tax returns up until December of this year without any additional Penalties. However, you will have to pay 1% interest on the outstanding tax amount.

For ex: If your total tax liability was Rs. 1 lac and you have paid Rs. 50,000 so far. While filing returns, you need to pay Rs. 50,500/- after adding up the 1% interest on the balance tax amount that is not yet paid.

If you don’t file the returns by March next year, you will end up paying Rs. 5000 + the 1% interest on the outstanding tax amount.

A Tip:
These penalties and interest % is revised regularly to deter people from delaying their tax return filings. So, next year this number could change to say Rs. 10,000/- penalty and 2% interest. If you file your returns on a future date, the penalties applicable at the time of filing will apply to you.


Some Last Words:

The government is giving citizens 1 year time time to file their tax returns which is more than sufficient for us to complete all requisite formalities. After all, this is a matter of a couple of hours of work if you enlist the help of a tax filing company or a matter of a couple of days if you opt to do it yourself. Either ways the penalties and interest are something we can avoid by completing our tax filing on time.

File your Tax Returns on time and stay peaceful!!!

4 comments:

  1. Penalty of Rs. 5000 only if filed after 31-Mar-2014 -Madhu

    http://www.moneycontrol.com/news/tax/heres-how-you-still-can-file-your-income-tax-returns_934659.html

    http://articles.timesofindia.indiatimes.com/2013-08-12/personal-finance/41331982_1_advance-tax-due-date-income-tax-returns

    ReplyDelete
    Replies
    1. Thank you Anonymous for the info. Was a mistake on my part. Info in the article updated to reflect the correct details.

      Anand

      Delete

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