Consequences of Late Filing of Income Tax Return !!!

Season of filing income tax return has just started. 31st July is the due date for filing tax return for individuals and others who are not required to get his accounts audited u/s 44AB of the I T Act. So, here is a quick update on four penal provisions related to late filing of return of income.

1. Pay interest u/s 234A

If you file return after due date , and after processing u/s 143(1) or after assessment u/s 143(3) or 144 of the I T Act, the tax arises, interest u/s 234A shall be charged for late filing of return which is imposed for period starting from the month after the due date (in case of individual 1st August  as the due date generally falls on 1st July)

2. No carry forward of business or capital loss

Section 80 of the I T Act provides that following loss cannot be carried forward if the return is not filed within due date

a. Business Loss ( including speculative loss)

b. Capital loss (short term or long term loss)

c. Loss in race horse maintenance

3. No revised return facility

Income tax Act, u/s 139(5) provides facility to revise the return within one year from the end of the month in which the return was filed or assessment order passed , which ever happened earlier. This facility of revising return is available to tax payer only if

a. Return is filed u/s 139(1) i.e. within due date. or

b. Return is filed in pursuance of notice u/s 142(1) of the I T Act.

4. Eight kinds of exemption /deduction not allowed

Exemption u/s 10A or 10B or deduction u/s 80IA,80IB,80IC,80ID & 80IE are not allowed if the tax return is not filed within due dates.