The deadline to file the Income Tax Return for the assessment year 2017-18 (financial year 2017-18) is on Monday, July 31. And if you are among those who have still not filed their return or were not planning on doing it at all, here is why you must not miss the deadline.
Loss of interest on advance taxes
If you miss the deadline of ITR on Monday, you will lose the interest payable to you by the IT department on the refunds on advance taxes paid or on tax deducted at source.
The IT department calculates the interest on a refund from the start of the assessment year ie, April 1 till the date of granting of refund.However, if you file the returns late, the interest is calculated from the return filing date. Thus, the delay of even a day means loss of four-month interest (April-July).
In you don't file the return in time, you will also not be able to carry forward losses except in cases of loss of house property. You can’t carry forward losses from capital gains, business income, income from speculation business etc. Even if you have paid the tax in time, your losses will not be carried forward if you don’t file your return in time.
Unpaid tax liability
If you miss the deadline, you will have to pay penal interest of 1 per cent per month from the due date of return filing till the actual day of filing. This penalty can be accompanied by prosecution by the IT department if the return is filed later than the assessment year and if it exceeds Rs 3,000.
Penalty for not filing tax returns
In case you fail to file your tax return by the end of the assessment year 2017-18 but you have paid all the tax liabilities, the tax department will impose a penalty of Rs 5,000 on you if you can’t convince them that the delay was justified or due to an unavoidable/uncontrollable circumstance.
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ITR crucial for accounts with cash deposit of 2 lakh or more
Taxpayers who deposited Rs 2 lakh or more post demonetisation are being screened by the government with a close lens. Failure to file tax returns in such cases would most likely result in a written letter from IT dept reminding you to file ITR. inaction could lead to legal action.
Those who made large cash deposits after Nov 8, 2016 will have to make this disclosure in the new Income Tax Returns (ITRs) forms.