Filing Income Tax Returns – Your Guide To Completing It Well In Advance
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10 Jul, 2018
It is the month of July and most of us have suddenly woken up to the need of filing our Tax Returns. Most salaried persons are now scrambling to ascertain their taxes and filing their Income Tax Returns for the financial year ended 31 March 2018 (in tax parlance, it is referred to as Assessment Year 2018-19).
Let’s take a look at the basics of filing your tax returns –
What are the due dates for filing returns?
For income earned from 1 April 2017 to 31 March 2018, you must file your Income Tax Returns for the Financial Year 2017-18 on the below dates –
|Category of Taxpayer||Due Date for Tax Filing|
|Individuals||31 July 2018|
|Body of Individuals (BOI)||31 July 2018|
|Hindu Undivided Family (HUF)||31 July 2018|
|Association of Persons (AOP)||31 July 2018|
|Businesses (Requiring Audit)||30 September 2018|
How you can file your Tax Returns –
Most tax payers are required to mandatorily file their return electronically on the e-filing portal of the Income Tax department – www.incometaxindiaefiling.gov.in
While some taxpayers approach their CAs or Tax Consultants to help file their tax returns some rely on websites like https://cleartax.in/ where they can file their Return on their own or take the help of a CA for a fee.
Why you should file your Returns on time –
Filing Returns online offers a series of challenges that are peculiar to the world of technology such as –
- Website crashing because of high volume of traffic
- Software update by the government causing loss of progress made using the older version
- Inability to make tax payment due to banks being closed on the last date of filing Returns (If tax is not paid, the return cannot be filed)
Apart from the above problems you can encounter, here are a few more compelling reasons to file your Returns on time –
1. If you file your Returns after the due date, then, depending on your tax payable, you have to pay interest at the rate of 1% per month or part of the month up to the date of filing. The said interest is charged on tax payable after deducting the TDS (tax deducted at source), TCS (tax collected at source), advance tax and other reliefs/ tax credits available under the law.
2. Even if interest is not payable as above, every tax payer who files the return beyond the due date has to mandatorily pay a fine as given below –
|Situation||Amount of fine payable|
|If Total Income does not exceed Rs. 5,00,000||Rs. 1,000|
|If Total Income exceeds Rs. 5,00,000 and the return is furnished before 31st December of the Assessment Year||Rs. 5,000|
|If Total Income exceeds Rs. 5,00,000 and the return is furnished after 31st December of the Assessment Year||Rs. 10,000|
3. If you do not file your returns by the due date you cannot carry forward any loss under the head ‘Profits and Gains of Business or Profession’ or ‘Capital Gains’.
4. The worst punishment for late filing of tax Returns is the power given to the Income Tax Department to prosecute you under section 276CC of the Income Tax Act. Depending on the tax liability, the punishment could range from 3 months to 7 years with fine. This particular power of prosecution has rarely been used by the Income Tax Department. But recently, hundreds of tax payers have got notices asking them to show cause why prosecution should not be launched against them for either not filing the tax return at all or for filing it late. It appears that the Central Government has taken a very stern view in this matter and has asked the Income Tax Department to be very strict in punishing defaulting tax payers.
It is therefore clear that the downside of filing one’s Tax Return at the last minute or after the due date is very high. Thus, file your Returns well in advance and not only will you save yourself some last-minute stress but you will also not have to pay avoidable penalties and fines.
Similar to how you must prevent a last-minute scramble to file your returns, you must also avoid adopting last minute tax-saving measures. Once your returns are filed, you can immediately start focusing on tax-saving investments for the current year. You should not consider Tax-Planning as a task but rather consider it as a tool to build your wealth. Read more on how the dreaded Tax-Planning can help you create wealth.