PENALTY ON LATE FILING OF INCOME TAX RETURN AY 2012-13

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Now A days all tax consultant ,business man,specially persons who have Earned salary income ,are in rush so that they can file their income tax return by due date i.e 31st July 2012 .we are also one of them.


Due date of filing of income tax return for Assessment Year 2012-13 Financial year 2011-12 is as under(read link for more details)
  1. In case of person who are not liable to get their accounts audited is 31.07.2012(extended to 31.08.2012 now )
  2. In case of person who's accounts are liable to be audited under any law is 30.09.2012 and partner of such firms and all companies.
In case of due date  31.07.2012(extended to 31.08.2012 now )  person earning income from following heads is covered.

  1. salary ,pension, 
  2. Income from other source like interest income ,
  3. Income from capital gain , 
  4. Income from house property and 
  5. Income from person owning small business and not liable to get their accounts audited are covered.
In brief all person other than those for which accounts are required to be audited is liable to file return on or before  31.07.2012(extended to 31.08.2012 now )  for Ay 2012-13

So in nutshell every body is trying to meet the deadline ie  31.07.2012(extended to 31.08.2012 now ) ,I and you are also doing efforts in this direction ,but do you know

what is the penalty if some one failed to filed his return by due date.................i.e 31.07.2012 (extended to 31.08.2012 now )

any guesses..........

no guess ,I will tell you ,In fact there is no penalty as such for this fault ,absolutely no penalty ,do you believe ,I have said that there is no penalty on late filing of return as such.But this is the fact .Specific penalty for late filing of return is prescribed u/s 271F which is briefed here under

If a person who is required to furnish a return of his income, as required under sub-section (1) of section 139 or by the provisos to that sub-section, fails to furnish such return before the end of the relevant assessment year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of five thousand rupees


so this section says end of relevant assessment year ,as for previous year 2011-12, assessment year is 2012-13 and its end on 31.03.2013 ,means there is no liability for late filing of income tax return up to 31.03.2013 and after that assessing officer can impose a penalty of 5000,and that is also his(AO) power which he may or may not exercise after giving due hearing to the assessee.

Now you would like to know why people are so much worried about the due date ,the reason is that as due date has been linked with various other section of the income tax act ,so it is significant in that manner .

so I have listed few impacts of late filing of the Income tax return and issues related to due date of income tax.



Impact of late filing of Income tax return and issue related to due date(The List is not exhaustive/complete)
  1. Interest u/s 234A:If there is tax due after deducting advance tax ,TDS and self assessment tax than interest will be applicable @1% per month and part thereof up to the date of filing of the return besides interest applicable u/s 234B or 234C.Means this interest is applicable only if there is any tax payable in your return .(INTEREST calculator 234BC online is available here)
  2. Loss of Interest on refund:You may loose interest on refund u/s 244A as delay in filing is attributable to assessee for the period by which you have filed late return.
  3. Audit Report:Person who are liable to get their accounts audited should get the audit report on or before the due date of filing return i.e 30.09.2012.Audit repot is only to be prepared and not to be filed any where.In simple word or boldly we can say that if audit report has been signed before 30.09.2011 that is enough,you can file return late and report particulars will be filled when ever you filed your income tax return.This is as income tax circular no 5/2007 point no 6 (read full circular)
  4. Revised return :Late /belated return can not be revised .This is major draw back .if you failed to file return in time then you can revise your income tax return. Though you may apply revision u/s154 which is lenghty process  
  5. Some of deduction under subsection 80 are not available for late return.
  6. Due date of income tax return is related to TDS deposite and disallowance u/s 40a(ia).
  7. Due date of Income Tax return is related to tax saving u/s 54,54B,54F and some other issues in capital gain saving account deposit scheme.
  8. Not able to carry forward the losses under various heads:you are not able to carry forward following type of losses if file return after due date
  • Speculation loss
  • business loss excluding loss due to unabsorbed depreciation and capital exp on scientific research
  • short term capital loss
  • long term capital loss
  • loss due to owning and maint. of horse races
However there is no impact on following type of losses even if return is furnished after the due date
  • loss from house property
  • business loss on account of unabsorbed depreciation and capital expenditure on scientific research.
(though delay can be condoned as per circular 8/2001 DT 16.5.2001 on fulfilling of certain condition)

so if you are falls under the ambit of the above points then you should furnish your return up to  31.07.2012(extended to 31.08.2012 now )  or 30.09.2012 as the case may be without any penalty.

Person who can afford to file late return 

If you have
  • already deposited due tax or due taxes has been deducted by your employer and nothing is due or
  • you are not claiming a Major amount as refund or
  • you have no losses to be carried forward
then you can fill return up to the end of the assessment year ie 31.03.2013 without any penalty.


Person who should file return on time.

If you have
  • balance tax to be deposited or short fall of tax or
  • huge amount of refund due to you or
  • you have losses to be carried forwarded as explained above
then rush to the department asap so that return can be filled on time.

NOTE:Friends the all things as explained above is to not encourage people to file voluntarily late return but only to inform taxpayers their liability so that they can take informed decision.

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