Jul 2, 2018

Why you must not delay filing your Income Tax returns this year?

RULES ARE TOUGHER THIS YEAR, AND THE HOLE IN YOUR POCKET WILL BE BIGGER IF YOU CHOOSE TO IGNORE THEM.
Come July, the Income Tax season will be in full swing. The I-T department requires assesses (anyone liable to pay tax) to file their returns for the previous financial year (2017-2018) by July 31, 2018. Usually, if you miss the deadline for whatever reason, you can file a ‘belated’ return. However, starting this year, there will be a hefty late fee that you will have to pay if you don’t file your return before July 31.

Hefty Fees for Late Returns

If you file your return after July 31, but before December 31, you will be required to pay Rs. 5,000/- as belated fee, and if you file your return after December 31, the late fee becomes Rs. 10,000. If your income is below Rs.5,00,000 a year, the late fee is capped at Rs.1,000 irrespective of when you file the return. Bear in mind though, that for the Financial Year 2017-18 (Assessment Year 2018-19), you cannot file a belated return after March 31, 2019.

The Advantage of Filing on Time

Apart from the fact that you won’t have to pay any penalties, filing on time also allows you to revise, or re-file your income tax return in case you have made any errors (such as providing the wrong bank account number) when you filed your original return. Belated returns, on the other hand, cannot be revised. It is also important to note that revisions for returns pertaining to Financial Year 2017-18 (Assessment Year 2018-19) cannot be made after March 31, 2019. You can revise your return any number of times within this time limit.

Your Form 16 is NOT your Income Tax Return

Your Form 16 is a statement from your employer that declares the tax that they have paid on your behalf. It does not mean that your Income Tax Return has been filed. It is simply a document that provides evidence of the tax amount that is lying in your name. Now, while the Form 16 is taken to be a valid proof of Income Tax paid in a number of places, there have been instances where it is rejected by banks or by Consulate offices (for visa purposes). So, it is recommended that you file your return anyway, just to be on the safer side.

If you’re a freelancer, you might also have tax lying in your name as evidenced by the Form 16As which your clients may have sent you. Once again, they are merely evidencing documents and not an income tax return.

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