Thursday, July 25, 2013

PENALTY ON LATE FILING OF INCOME TAX RETURN AY 2013-14


on Thursday, July 25, 2013

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 2013 Now Extended up to 05.08.2013.we are also one of them.

Due date of filing of income tax return for Assessment Year 2013-14 Financial year 2012-13 is as under(read link for more details)
  1. In case of person who are not liable to get their accounts audited is 31st July 2013 Now Extended up to 05.08.2013
  2. In case of person who's accounts are liable to be audited under any law  and partner of such firms and all companies is 30.09.2013
Person earning income from following heads is covered under due date 31st July 2013 Now Extended up to 05.08.2013
  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 31st July 2013 Now Extended up to 05.08.2013  for Ay 2013-14

So in nutshell every body is trying to meet the deadline i.e. 31st July 2013 Now Extended up to 05.08.2013 we 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 31st July 2013 Now Extended up to 05.08.2013

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

no guess ,we will tell you ,In fact there is no penalty as such for this fault ,absolutely no penalty ,do you believe ,we 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 ,for previous year 2012-13, assessment year is 2013-14 and it will ends on 31.03.2014 ,means there is no penalty for late filing of income tax return up to 31.03.2014 and after that assessing officer(AO) 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 we 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 30.09.2013.E filing of audit report s mandatory from ay 2013-14
  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 not revise your income tax return. Though you may apply revision u/s154 but it has few limitation and very lengthy 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 deposit and dis allowance 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 un absorbed 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 un absorbed 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 31st July 2013 Now Extended up to 05.08.2013  or 30.09.2013 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 i.e 31.03.2014 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: 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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  1. very good post , keep it up STI

    ReplyDelete
  2. It is not clear from the above info that whether a house wife, who has no source of income, but a savings bank account which gives her a few hundred rs interest and never filed any income tax, will also be liable to file the return if she is a PAN card holder.

    ReplyDelete
    Replies
    1. No, A person having gross total income less than the exemption limit is not liable to file income tax return.

      , as she has income less than 2,00,000, So she is not required to file return even she has a PAN

      Delete
  3. What is the due date of filing of Income Tax Return in case of a Designated Partner of a LLP? Perhaps, he is not a working partner as said in Section 139 of the Income Tax Act.

    ReplyDelete
  4. thanks for valuble information

    ReplyDelete
  5. There is a mistake in 4th point of Impacts portion- "This is major drawback, if you failed to file return on time then you can revise your income tax return." Please get the sentence corrected. Thanks...
    CA.

    ReplyDelete
  6. excellent....
    valuable information

    ReplyDelete
  7. good and use full information....

    ReplyDelete
  8. what if I file the income tax before 31st July and then later want to revise? is it possible?

    ReplyDelete
  9. HI, can i file my last two years i.e. AY 2011-12 and 2012-13 ITR now. need these for home loan. Have already filed this year ITR. I know am i laaazzzy :-). but i work like a rocket..not that i am super efficient like a rocket ......its only when my back is on fire i really start working.

    ReplyDelete
    Replies
    1. No you can file return only for ay 2012-13 now.

      show salary certificate for ay 11-12 ,bank can not insist on income tax return

      Delete
  10. There is an error in the date when you say 'no penalty for late filing upto 31.03.2014'. It should be 31.03.2015

    ReplyDelete
  11. WHILE FILLING ITNS 280 CHALLAN IF I DONT PAY THE CESS IS IT ACCEPTABLE.

    ReplyDelete
  12. What if the return is delayed even beyond the end of the AY? There is a specific case where the returns are not filed since past 3 years (excluding the current AY). However, there is not tax payable in any of those years, but there are refunds due. In this case, how to proceed with returns and what will be the penalty?

    ReplyDelete
    Replies
    1. First you have to check whether the person liable to file return in last years ,if not, then no question of penalty.
      In Fy 2010-11 & 2011-12 ,no return filing requirement for salaried person if income is up to 5 lakh (subject to condition)

      Normally if gross income is less than exemption limit then return filing not mandatory and no question of penalty in that case also

      Delete
    2. Thanks.

      Precisely, in FY 2009-10 & FY 2010-11 taxible income is well above 5L ceiling but there is excess TDS resulting in refund.

      In FY 2012-13, taxable income is below ceiling, there is no tax/no refund.

      Return filing is quite regular and on-time except for above three years.

      Delete
    3. As per rule return can not be filed For both the year now .

      However as in these years return filing can be done through paper filing also,you can try to file these return in back date through tax professional.

      As given above penalty can be levied by ITO up to 5000/- for each return.

      Delete
  13. I am the only legal heir of my father who was a pensioner. I have deposited the self assessed income tax on 30.07.13 for AY 2013-14 but unable to file ITR1 as I donot have legal heir certificate. What is legal heir certificate? Who will issue it for Kolkata jurisdiction. What is the penalty for late filing of return in this case. P.G

    ReplyDelete
  14. I need to pay tax online and tried to fill
    https://onlineservices.tin.egov-nsdl.com/etaxnew/PopServlet?rKey=-1914718357


    However I was not sure what option to select in "Nature of Payment"
    Not clear on what to select.
    if any one can assist. it would be of great help.

    ReplyDelete
    Replies
    1. If you are paying balance tax for a 13-14 then select code 300 self assessment tax .

      Read more here
      How to deposit balance Tax

      select assessment year 2013-14

      Delete
  15. I have not filed my ITR for Ass Yr 2012-13 and yet to file for Ass Yr 2013-14. In FY 2011-12 and FY 2012-13, I have not recd any salary or business income as I am unemployed. I only have bank interest income which is less than 1 lac. Do I still need to file the ITR for both years? Also will there be any penalty for not filing ITR for Ass Yr 2012-13? Pls advise

    ReplyDelete
  16. If I can afford to file a late return for AY 2013-14 under which Section should I file it 139(1) or 139(4)?

    ReplyDelete
  17. If i file a nil tax return now for the a.y. 2013-14. What penalty will be charge to me. Kindly give answer

    ReplyDelete
    Replies
    1. No penalty will be charged as return is voluntary return

      Delete