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15 July, 2016

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Go Go Go !!! File your Income Tax Return to Avoid Penalty & Interest

Go Go Go !!! File your Income Tax Return to Avoid Penalty & Interest

Income Tax might be the first thing on your mind, given that tax season is approaching. Some of you might be just way ahead of all others and finished tax computation and tax payment if any. But for those, who are still relaxed and are not yet gathered tax related documents, this article is for you.

- Due date of filing returns



Due date

Company Assessee

30th September

Working partner of a firm whose accounts are to be audited

30th September

Any person required to get the accounts audited

30th September

Any other Assessee

31st July


- Tax payment


Tax payment is pre-requisite or filing return of income. Hence, it is required that you should check whether you have any tax which is yet to be paid.


1. Tax on salary income


If you have submitted your other income, including income from interest income or loss from house property etc., then your employer will deduct the tax accordingly. In such case, you need not worry about tax payable. But be sure to check that every paisa earned is considered in your income tax computation. Especially, in case of switch of jobs, you need to ensure that income from your previous employer is also considered. Please maintain physical proofs of investments claimed for deductions.


2. Income from house property


Most of the people may be claiming interest on housing loan as negative income from house property. However, if you have let out property or another property (idle), income from such house property has to be considered while reducing municipal taxes and standard deduction.


3. Income from business or profession


This has to be ascertained by preparing profit and loss account. All Business expenses are not deductible (for E.g. personal expenses); hence it is necessary to consult your tax adviser here.


4. Income from capital gains


This is quite complex, hence it’s better to consult your tax adviser before calculating tax and claiming any deductions thereof. For E.g. exempt long term capital gains on sale of equity shares after 1 year of purchase.


5. Deductions and exemptions


Generally, deductions and exemptions need supporting documents, for E.g. for claiming deduction under section 80C, you need to have documentary proof of payment.


6. TDS and advance tax paid


TDS already deducted on your income and advance tax paid would be reduced from tax liability.

All and all you need to ensure that you have considered every income in your tax computation. It is better if you consult your tax adviser in case you are earning under more than one head.


- Tax payment


Once you have your tax liability determined before filing of return of income, you have to pay off tax liability if any. This pending tax liability should be paid off as Self Assessment (SA) Tax.


- Return filing


Once your tax liability is paid off, you should fill the return of income along with challan details for SA Tax. If you file your return of income within due date as mentioned above, then there is no need to worry.

However if you file your return of income after due date, then you may face consequences for such belated return. It is explained in next part.


- Consequences for belated return


1. No carry forward of loss other than depreciation to next assessment years.


2. No revised return can be filed if original return is belated.


3. You won’t receive any interest on refund, even if you have claimed refund in such belated return.


4. No belated return can be filed after 2 years from the end of the financial year.


5. Interest on tax


a. Interest under section 234A


This interest is levied where unpaid tax liability remains unpaid after due date of filing the return @ 1% per month, till it is paid off. This is in addition to interest under section 234B and 234C, if the return is filed after due date.


b. Interest under section 234B


This is levied where there is short payment or no payment of advance tax.


c. Interest under section 234C


This interest is levied if there is deferment of advance tax payments.


6. Penalty for non filing of return within due date


If the belated return is filed within one year from the end of the relevant financial year, then there is no penalty. However, there should have been no tax liability for such non filed return. In case, the belated return is filed after the expiry of one year after the end of the financial year, then Assessing Officer has a discretionary power to levy penalty up to Rs. 5000.



If you have any loss to be carried forward or high amount of refund to be claimed or have unpaid tax liability, then you should make a run for filing the return on or before due date. This will save you from unnecessary burden of interest and penalty due to non filing of return within due date.


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