If you file your Income tax return (ITR) beyond the deadline, you have to pay penal interest on unpaid tax liabilities.
August 5 (Today) being the last date to file income tax return (ITR) for FY2016-17, you have only few hours to file your ITR. Yesterday, the income tax department said its field offices will remain open till midnight today to facilitate very senior citizens and those with income below Rs. 5 lakh to file tax returns for FY2016-17. But if you still miss the deadline today to file your ITR due to any reason, it does not mean that you cannot file your return for FY2016-17.
You can file belated return till March 2018 for financial year 2016-17. However, if you file belated return (ITR), you may not be able to avail some tax benefits like carrying forward of capital losses over next assessment years. Income tax rules in India allow loss under the head ‘capital gains’ to be set off against any profit under ‘capital gains’ head in the following assessment years. ‘Long term capital loss’ can be set off only against ‘long term capital gains’. However, ‘short term capital losses’ are allowed to be set off against both ‘long term gains’ and ‘short term gains’. If you are not able to set off your entire capital loss in a particular assessment year, both short term and long term loss can be carried forward for 8 assessment years immediately following the assessment year in which the loss was first booked.
Also, if you file your ITR beyond the August 5 deadline, you have to pay penal interest on unpaid tax liabilities at the rate of 1 per cent per month. If the income tax department raises any additional tax demand than what you have already paid, then also you have to pay a penal interest on that. Tax experts advice to deposit unpaid tax liabilities if you have any, at the earliest, even if you file a belated return.
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