In this article I shall be discussing the Income tax returns as well as the benefits of filing the returns within the relevant due date.
An original return under Section 139(1) is termed as one that is filed on or before the due date of return. Individuals and businesses, not required to get their books of accounts audited are required to file their Income tax returns before 31st July of the assessment year. Companies, individuals and firms that are subject to audit as well as partners of such firms are required to file their Income tax returns on or before 30 September of the assessment year.
A belated return as per section 139 (4) is one that is filed beyond the due date. As mentioned above once a return is filed late, it will be termed as the final return and can never be revised.
There are certain consequences for delay in filing of Income tax returns:
- Penal interest at 1% per month or part of a month for late filing will be levied u/s 234A. The interest amount is computed on the balance tax payable at the time of filing of Income tax return.
- Business losses, Speculation loss, capital gains losses and losses from owning and maintaining race horses cannot be carried forward to future assessment years if the Income tax return is filed late.
- The Due date of income tax return is relevant to related to capital gains tax saving schemes u/s 54, 54B, 54F and even capital gain saving account deposit scheme.
- Interest on IT refunds u/s 244A may not be paid by the department if the Income tax return is belated.
A revised return u/s 139(5) is one that is filed within the due date of filing of return but is corrected later on. Such revised return will replace the original return in all respects except only the date of filing the return. The time limit for filing the revised Income tax return is one year from the end of the relevant assessment year or before the completion of assessment, whichever is earlier. Therefore, a return for the year ended 31st March 2012 i.e. A.Y. 2012 – 13, that needs to be revised can be done so till 31st March 2014 or before the completion of the assessment whichever is earlier.
Revision of returns is permitted only if the original one was filed on or before the due date. Revision can also only happen if there is an error of omission or if the error is not on purpose.
It is important to note that the penal interest u/s 234A as mentioned earlier will not be applicable in case of a revised return as it replaces the original return in all respects. Therefore, since the original income tax return is one that is deemed to be filed within the relevant due date, the question of penal interest for late filing will not be applicable in case of revised returns filed after the due date.
A return cannot be simply revised by filing a letter with the AO without actually filing the revised return. In the case of Goetze India v/s CIT, the company sought to claim a deduction in the original return by simply filing a letter with the Assessing Officer. It was held that the deduction was disallowed as there was no provision in the Act that allowed an assessee to make an amendment in the return without filing a revised return first.
In case a person has suffered any losses under the head ”Profits and gains or business and profession” or under capital gains, such person is required to file a loss return u/s 139(3) on or before the due date of filing of the return of income. It should be noted that the time limit applies to only business losses and capital losses.
However, the following losses can still be carried forward to future assessment years even if the Income tax return is filed late i.e. loss from house property& business loss on account of unabsorbed depreciation & capital expenditure on scientific research.
Author Bio :
Aashish Ramchand is Co-founder of an e-filing and online tax advisory website. A chartered accountant by profession and passionate about Indian taxation advisory and love to write about the Indian tax system and its various nuances. He suggests to visitwww.makemyreturns.com for more information.