March 31, 2018, was the deadline to file income tax returns (ITR) for the financial year 2015-16 and 2016-17. In case you haven’t filed your ITR for FYs 2015-16 and 2016-17, you cannot file a belated return anymore.
If you have not filed your returns for these two FYs, read on to find out what you can do now:
File a Condonation of delay request for specific cases:
The income tax department can allow taxpayers to file returns post the deadline for specific cases. “The Central Board of Direct Taxes (CBDT) has issued a circular in this regard where if the taxpayer has tax refund pending or wish to carry forward his losses and missed the deadline of filing of tax returns, then he can file an application to the Income tax commissioner or the prescribed authority,” explains Abhishek Soni, CEO, tax2win.in, a tax-filing firm.
These are the parameters based on which applications can be accepted or rejected by the income tax department:
a) The claim is correct and genuine
b) The case is based on genuine hardship on merits
c) Income is not assessable in the hands of any other person under the Income Tax Act
d) The refund has arisen as result of excess tax deducted or tax collected at source, advance tax or self-assessment tax.
The time limit to file such application is six years from the end of the assessment year for filing the return. (Assessment year is the year immediately following the financial year). Therefore, for such taxpayers who have missed the deadline of March 31, 2018, can file such application by 31 March 2023 (for FY 2015-16) and 31 March 2024 (for FY 2016-17). In case of belated tax refund, no interest will be paid by the department to you.
The application will have to be disposed by the department within six months from the end of the month in which the application is received as far as possible.
- If taxes are also payable by you
If you have not paid taxes for FYs 2015-16 and 2016-17, then experts advice that one should at least pay all your taxes and interest along with it as applicable under section 234A, 234B or 234C, even if they cannot file the ITR post March 31, 2018.
- If all taxes are paid but return not filed
If the taxes you are supposed to pay have been cleared but if you have not filed your ITR before March 31, 2018, then you do not have the option to file their ITR now or to apply for condonation of delay. However, the department can issue a notice under section 271F for levying of penalty on non-filing of ITR. The maximum penalty in such a case is Rs 5,000. No penalty will be levied if there is a genuine reason for such non-compliance and if the income tax officer is satisfied with the reasons, adds Soni.
- Actions that tax department might take against you
For non-filing of return, the department can take various actions against you. This includes issuing a notice or in the worst case scenario, you might get prosecuted and get a maximum jail term of seven years.
Naveen Wadhwa, DGM, Taxmann.com says “If TDS has been deducted from your income and you have not filed your ITR, then the department can issue you a notice under 142 (1) (i) for non-filing of returns. A penalty may also be levied by the assessing officer of Rs 5,000 for non-filing of income tax returns.”
Every taxpayer is required to file ITR if his/her total income exceeds the basic exemption limit. The department can issue you a notice under section 148 for income escaping the assessment for non-filing of ITR. You will be required to respond to that notice on the income tax e-filing website as well as file your ITR to comply with the notice issued by the tax officer.
Penalties under such case will be levied for under-reporting of incomes. For FY 2015-16, a penalty of 100-300 percent of the tax payable amount will be levied as per the discretion of the assessing officer. For FY 2016-17, a penalty of 50 percent of the tax payable amount will be charged, adds Wadhwa.
Soni says, “If a person has at least paid his taxes along with interest even if he/she cannot file the ITR after March 31, 2018, then in such a case, chances are he/she might not be liable to pay penalty for under-reporting of income.”