What Happens If you File IT Returns Late?

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You might be having the following query. What If I Have Payed My Tax But Did Not File My Returns On Time?. Even if you miss the deadline of July 31st 2013 you can still file your returns by March 31st 2014.However if you have a business and you want to carry forward the loss to the next year then you have to file your income tax returns on time. You must be knowing that if you have any outstanding taxes after TDS as well as paying your advance taxes you would have to pay simple interest at the rate of 1% per month from the due date till the date of filing the return. You need to note that if you have paid your tax before March 31st 2013 but you cannot file your returns before July 31st 2013 then you can file your returns by March 31st 2014.If you file your returns after March 31st 2014 you will have to pay a penalty of INR 5000.

Let us consider the following example. You have an income tax liability of INR 50000.You pay advance tax of INR 5000.You have TDS of INR 25000 which is already deducted.

You have the following calculations:

Net Tax Payable = Income Tax Liability -TDS-Advance tax=50000-25000-5000=INR 20000.
You have to file your returns by July 31st 2013.However after paying taxes lets say you will file your return on November 10th 2013.Then you have to pay a penalty of 1% for 4 months as partial months are taken as full.

Your Final Amount= Net Tax Payable+ (4% of Net Tax Payable) Your penalty is calculated as INR 20000+ (4% of INR 20000) =INR 20000+INR 800=INR 20800.

What happens if you file your returns on May 15th 2014.You have filed your returns 10 months late and partial months are considered as whole.

Your Final Amount = Net Tax Payable+ (10% of Net Tax Payable) + Late Penalty
Your Final Amount = 20000+10% of INR 20000+INR 5000=INR 27000.

I would like to end this article with the famous quote " Death And Tax Have No Convenient Time ". You have to make time to pay those income taxes.

 

 

 

 

 

For further information on the topic you can CONTACT Prajna Capital on 94 8300 8300 by leaving a missed call.

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