PENALTY ON LATE FILING OF INCOME TAX RETURN AY 2015-16 FY 2014-15

Now A days all tax consultants ,business men,specially persons who have earned salary income ,are in rush to file their income tax return for financial year 2014-15 by due date i.e 31st August, 2015.

Due date of filing of income tax return for Assessment Year 2015-16 (Financial year 2014-15) is as under (read more details about Due date of Income Tax return Fy 2014-15)

1. In case of person who are not liable to get their accounts audited = 31st August, 2015 
2. In case of person whose accounts are liable to be audited under any law  and partner of such firms and all companies = 30.09.2015

Person earning income from following heads is covered under due date 31st August 2015 .

1. Salary ,Pension, 
2. Income from other source like interest income ,
3. Income from capital gain , 
4. Income from house property and 
5. Income from small business and accounts are not liable to get their accounts audited are covered.

In brief all person other than whose accounts are required to be audited is liable to file return on or before 31st August 2015 for Ay 2015-16

So in nutshell everybody is trying to meet the deadline i.e. 31st August 2015. But do you know

What is the penalty on late filing of Income tax return AY 2015-16 (Fy 2014-15) ?

any guesses..........

No guess ,we will tell you ,In fact there is no penalty as such for this fault ,absolutely no penalty ,do you believe ,we have said that there is no penalty on late filing of return as such.But this is the fact .

Specific penalty for late filing of return is prescribed u/s 271F which is briefed here under

If a person who is required to furnish a return of his income, as required under sub-section (1) of section 139 or by the provisos to that sub-section, fails to furnish such return before the end of the relevant assessment year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of five thousand rupees

so this section says end of relevant assessment year ,for previous year 2014-15, assessment year is 2015-16 and it will ends on 31.03.2016 ,means there is no penalty for late filing of income tax return up to 31.03.2016 and after that assessing officer(AO) may impose a penalty of 5000,and that is also his (AO) power which he may or may not exercise after giving due hearing to the assessee.

Now you would like to know why people are so much worried about the due date ? 

The reason is that as due date has been linked with various other section of the income tax act ,so it is significant in that manner .

so we have listed few impacts of late filing of the Income tax return and issues related to due date of income tax return.

10 Major reasons why you should file Income tax return on Time.

(The List is not exhaustive/complete)

1. Revised return :Late /belated return can not be revised .This is major drawback .If you failed to file return in time then you can not revise your income tax return. Though you may apply revision u/s 154 but it has few limitation and very lengthy process.
2. Interest u/s 234A:If there is tax due after deducting advance tax ,TDS and self assessment tax then interest will be applicable @1% per month and part thereof up to the date of filing of the return besides interest applicable u/s 234B & 234C. This interest is applicable only if tax is payable,if you have already deposited the Balance Tax then no interest is applicable even if return is filed after 31st August 2015.
3. Loss of Interest on refund:You may loose interest on refund u/s 244A as delay in filing is attributable to assessee for the period by which you have filed late return.
4. Audit Report:Person who are liable to get their accounts audited should get the audit report on or before the due date of filing return i.e 30.09.2015.E filing of audit report s mandatory from ay 2013-14
5. Some of deduction under sub sections of Section 80 are not available for late return.
6. Due date of income tax return is related to TDS deposit and dis allowance u/s 40a(ia).
7. Due date of Income Tax return is related to tax deduction u/s 54,54B,54F and some other issues in capital gain saving account deposit scheme.
8. Not able to carry forward the losses under various heads:you are not able to carry forward following type of losses if file return after due date (read more about set off and carry forward of Losses)
1. Speculation loss
2. business loss excluding loss due to unabsorbed depreciation and capital exp on scientific research
3. short term capital loss
4. long term capital loss
5. loss due to owning and maint. of horse races
9. However there is no impact on following type of losses even if return is furnished after the due date
1. loss from house property
2. business loss on account of unabsorbed depreciation and capital expenditure on scientific research.
10. Though delay can be condoned as per circular CIRCULAR 9/2015 [F.NO.312/22/2015-OT], DATED 9-6-2015 on fulfilling of certain condition)

so if you are falls under the ambit of the above points then you should furnish your return up to 31st August 2015.

Person who may afford to file late return 

If you have

• Nil Tax liability or
• Already deposited due tax /balance tax or 
• tds deducted by your employer and nothing is due now or
• No Major amount as refund or
• no losses to be carried forward

then you may file return up to the end of the assessment year i.e 31.03.2016 without any penalty.

Person who should file return on time.

If you have

• balance tax to be deposited or shortfall of tax or
• huge amount of refund due to you or
• losses to be carried forwarded as explained above

then rush to Income Tax department website to file Your Income Tax Return in Time.

NOTE: all things as explained above is to not encourage people to file voluntarily late return but only to inform taxpayers their liability so that they can take informed decision.