Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Not Yet Filed Your Income-Tax Returns? Read This! - Outside View by PersonalFN
  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Not Yet Filed Your Income-Tax Returns? Read This!
Mar 26, 2015

Paying taxes and filing returns are something that all of us have to comply with. It is not only our legal responsibility but should also be viewed as a moral responsibility. By paying taxes on time, you contribute to the development of our country. Also, Income-Tax (I-T) returns validate your credit worthiness before financial institutions and help you in accessing many financial benefits such as bank loans and much more.

Missing the deadline for filing I-T returns can give you sleepless nights. So here are some vital points you must take cognisance of as an individual assessee if you have not yet filed your returns and / or paid your taxes.

  1. Non filing of returns

    If you have not filed income-tax returns by July 31, for the last financial year you can still do so by the end of this month, i.e. March 31, without paying any penalties. As per Section 139(4) of the Income-Tax Act, 1961, one is allowed to file his / her I-T returns until 1 year of the completion of the relevant assessment year or before the completion of the assessment, whichever is earlier. Hence, filing of returns can be done even after March 31, but it must be borne in mind that in this case, a penalty of Rs 5,000 may be imposed upon you. This decision is taken by the assessing officer who has the right to waive off this penalty.

  2. Non-payment of tax due

    If you have not paid income-tax on time, then a penal interest of 1% per month (simple interest) will be levied on the amount of tax due.

  3. Non-payment of advance tax

    If the amount of tax that you would be eligible to pay exceeds Rs 10,000, then advance tax needs to be paid in 3 instalments. The first due date is September 15, where you are required to pay at least 30% of the tax payable as advance tax. The second due date is December 15, where at least 60% needs to be paid and on the last due date i.e. March 15, 100% of the tax payable needs to be paid. If you defer any of these payments, then simple interest of 1% per month would be levied as penalty.

  4. Not allowed to make any amendments

    If you have not filed your returns on or before July 31, you would not be allowed to make any changes in case if you make any errors while filing your returns later. However, if you have filed your returns by the aforementioned deadline, then you have a chance to correct any errors and make changes in your tax form any number of times before March 31 or till the time your returns are assessed, whichever is earlier.

  5. Not allowed to carry forward losses

    Likewise, if you haven't filed your returns on or before July 31, you are precluded from carrying forward losses. But in case if you have filed your returns well on time, you are allowed to carry forward your losses for the next 8 years and adjust it with gains that you may make in the future.

PersonalFN is of the view that you must always file your I-T returns on time and make sure that you pay your taxes before the due date. This will not only provide you with several benefits, but also save you from the interests and penalties that can arise later. If you have not done either of the things then you must consult your tax consultant and do so immediately.

PersonalFN believes that tax planning as an exercise is not just limited to filing returns and paying taxes. It is a process whereby your larger financial plan should be taken into consideration after accounting for your age, financial goals, ability to take risk and investment horizon (including nearness to financial goals). And by adopting such a method of tax planning, you not only ensure long-term wealth creation but also meeting your important financial goals. Thus, tax planning should never be left for the last moment as that would not help you in a big way and would sabotage the essence of holistic tax planning.

PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.


The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

Equitymaster requests your view! Post a comment on "Not Yet Filed Your Income-Tax Returns? Read This!". Click here!


More Views on News

The Right Financial Advisor Is Around the Corner (Outside View)

Mar 10, 2016

An opportunity to find an impeccably trustworthy and competent financial guardian is in the offing.

Why financial planning should be dull and boring (Mutual Fund Corner)

Feb 29, 2016

Most financial planners come out as whiz kids who throw around financial jargon. But financial planning can be actually easy, provided one follows a disciplined approach.

More Views on News

Most Popular

Here's What You Should Do in this Market Crash(The 5 Minute Wrapup)

Feb 6, 2018

The market correction has provided a golden opportunity to buy five high-quality safe stocks.

The Era of Easy Money is Coming to an End. What Happens Now?(Vivek Kaul's Diary)

Feb 9, 2018

The easy money policy of the Federal Reserve of the United States, which drove up stock markets all over the world, is ending, with the Federal Reserve looking to shrink its balance sheet.

The Markets Want Your Money. Don't Give It to Them.(Smart Contrarian)

Feb 9, 2018

MFs are having a gala time taking money from over-eager investors and funneling it into equities. Smart investors, though, know better than to do that.

The Big Gamble(The Honest Truth)

Feb 15, 2018

Once you accept the fact that elections are round the corner and that this budget is geared to reach a 40% target, everything makes sense.

When Small is Not Always Beautiful(Chart Of The Day)

Feb 6, 2018

Big companies enjoying tax deductions and exemptions have an edge over the small companies.


Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms