New Delhi: Have you filed your income tax return for the financial year 2017-18? August 31, 2018, is the last date for filing income tax return (ITR). Although you can file your ITR even after August 31, 2018, but before the end of the financial year, you should avoid doing that as it may cost you a lot. The government has already given one-month extension to the original deadline of July 31 for filing ITR. So there may not be any further extension in the timeline.
Individuals and Hindu Undivided Family (HUF) having an income of more than Rs 5 lakh or claiming income tax refund should compulsorily file their ITR.
Here are few reasons for which you should file your ITR before August 31
1) Penalty payable on late filing of ITR: If you file your ITR after August 31, you may have to pay a penalty, which is Rs 1,000 if your income is less than Rs 5 lakh. For those having an income of more than Rs 5 lakh, belated return fee will be Rs 5,000 if the ITR is filed before December 31 2018. And, if it is filed after December 31 then the fee will be Rs 10,000. However, it may be noted that imposition of penalty is dependent on the assessing officer.
2) Faster processing of refund: Income tax returns are processed on first-come-first-serve-basis. As soon as you complete the ITR filing process, the income tax department will ascertain your tax liability for the financial year and if there will be any refund due, then it will be processed accordingly. However, if you file your ITR after the August 31 deadline, then processing of refunds will also be delayed. It may be noted that a taxpayer can claim income tax refund in a return filed after August 31 also. However, such returns will be accepted after you file a letter for condonation of delay with the I-T department. Also, the letter should be accepted by the income tax officer.
3) Late filing may result in levy of interest: Imposition of penalty on late filing of ITR is done on a case to case basis and is dependent on the income tax officer. But in most of the cases, the taxpayer is required to pay interest at 1 per cent per month on the due income tax.
4) Full interest on refund: Filing of ITR before the deadline entitles you for interest on the tax refund if any. According to Section 244A of Income Tax Act., taxpayers are entitled to interest at 0.5 per cent for every month from the first day of April of the assessment year to the date on which the refund is granted. Interest will be payable if the refund arises on account of tax deduction at source (TDS) or advance-tax payment.
5) More time for revising ITR later: The sooner you file your ITR more time you will get to revise it if you find any error later. According to revised income tax rules, a taxpayer can revise his return for FY2017-18 before March 31, 2019. Earlier there was a 2-year window to submit a revised return but now that has been reduced to one year.
6) Carry forward of losses: Income tax laws in India allow you to carry forward your business loss, unabsorbed loss under house property and capital loss for up to 8 years so that you can set that off against your income/capital gains in the future years. However, if you file your ITR after the due date of July 31, you won’t be eligible to carry forward business/capital loss.