Late and revised tax returns

The deadline for filing income tax returns (ITRs) for the fiscal year ending March 2021, in the case of individual taxpayers, was December 31, 2021. Missed this deadline? Pursuant to Section 139(4), any person who has not provided a return within the time limit may provide a late return and for fiscal year 20-21, such returns may be filed by March 31, 2022.

Late filers, filing between January 1 and March 31, 2022, must pay a late penalty! Those with a total income above Rs 5 lakhs have to pay a penalty of Rs 5,000, and those with an income below Rs 5 lakhs pay Rs 1,000. However, someone with an income of, say, Rs 2 lakhs, who is below the tax exemption limit, but wants to apply for a TDS refund, can file the return, without paying any penalty.

A taxpayer who must obtain a refund from the tax authorities, but who did not file his return before December 31, must he pay a penalty if he wants to file his return now? Yes. For example, if his total income is more than Rs 5 lakhs, even if there is a refund to be claimed, he has to pay a penalty of Rs 5000.

What happens if the declaration is not filed before March 2022? If this deadline is also missed, one cannot voluntarily file ITR. In such cases, the ITR can only be filed in response to a notice from the tax administration. So be sure to file your return before the end of this fiscal year.

Filing late, however, will not bring all the benefits of timely filing! Radhakrishna has over Rs 30 lakhs in losses from F&O (Futures and Options) trading. Koushik has a loss of Rs 10 lakhs from the sale of an apartment. None of these losses, which are otherwise available to be carried forward into the future, may be carried forward if the returns are not filed within the original or extended deadlines. A late return will only give the benefit of carrying forward the losses on the property of the house and nothing else.

Revised statements

After filing the return, if a taxpayer notices errors or has omitted to report certain income or claim certain expenses, he can revise the return, without paying a penalty. According to Article 139(5), even a late ITR can be revised. Those who have filed the declarations can check the Annual Information Declaration (AIS) once and see if anything has been overlooked in the declaration and, if so, they still have the opportunity to revise the declaration.

Delay tolerance

The tax authorities give sufficient opportunities to taxpayers to file the declaration, request the refund. Supposing a taxpayer realizes after a year, say in 2023, that he has failed to file the returns for AY 2021, does he have the option to file the return? He can request the Income Tax Commissioner through a Delay Tolerance Letter and if the officer finds that the reasons for the delay or non-filing of returns are justified, he can grant this request and allow the possibility of filing the declarations.

E-Checking Returns

Finally, be aware that the ITR is considered a valid declaration only if the electronic verification is carried out within 120 days of the date of filing of the declaration. If the return is not verified, the tax return will not be treated as a valid return by the ministry. As a result, your RTI will not be taken back for processing and all the penal provisions for non-production of declarations may be triggered by the department.

(The author is a Chartered Accountant based in Bangalore)

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