March 31 is not just the end of the Financial Year (FY) 2018-19. It’s also the final deadline for you to file your belated income tax returns for financial year 2017-18. A FY starts from April 1 and ends on March 31 of the following calendar year. The FY is followed by its Assessment Year (AY). The AY for 2017-18 is therefore 2018-19. Tax returns normally need to be filed by July 31 of the AY. However, for those who miss this deadline, the next two deadlines are December 31 and March 31 of the same assessment year.
WHY IS MARCH IMPORTANT?
If you had filed your ITR before the due date of July 31, 2018 (which was later extended to August 31), you don’t need to pay any penalties. But if you failed to file your returns by August 31, you had the chance to file by December 31, but with a penalty of Rs 5,000. And if you missed the December deadline too, you still have the chance to file before March 31, with a penalty of Rs 10,000. However, if your taxable income is below Rs 5 lakh, you pay a flat penalty of Rs 1,000 only, assuming you file the belated return by March 31. If you fail to file the ITR for FY 2017-18 by March 31 2019, you may no longer be able to file it. Not just that, if you have already filed the ITR for FY 2017-18, March 31, 2019 is the last date for you to file a corrected return in case you wish to make changes to your filing.
WHAT IF YOU MISS THIS DEADLINE?
If you haven’t filed your returns, you could get into some trouble with the income-tax department. Firstly, you may not be able to file your returns for FY 2017-18 after this date. Depending on your tax liability, the income-tax department can act against you. It reserves the right to penalise or prosecute you. Under prosecution, the imprisonment term can go up to seven years. The penalty can be as high as 50 per cent of your earned income in the relevant financial year or as per the prescribed rule.
HOW TO FILE OLD ITR AFTER MARCH 31
While there is a way to still file your returns after March 31, the trouble is wholly avoidable. First of all, you need to file the application under Section 119(2)(b) for condonation. This is the final option that you may be able to exercise after missing the final belated returns deadline. You can make this application to the authority with vested powers to pardon your delay. You can submit a condonation application within six years from the end of the assessment year in which you failed to file the return. Also, a break in your ITR filing chain can hurt your chances of getting a loan or credit card. Usually banks and lenders seek your ITR details for 2 to 3 years when you apply for fresh credit. Also, a missed ITR may also pose difficulties in getting visas to certain countries that demand proof of income.
Missing the belated ITR deadline can put you in deep trouble as the I-T department may send you a notice and take action against you. If you haven’t filed your returns for 2017-18, it's best to immediately consult your tax advisor and act quickly to meet the deadline.
— The writer is CEO, BankBazaar.com
