Filing your income taxes on time can actually help you save money. Find out how..

As per provisions of Income-tax Act,1961 every assessee shall file his return of Income on or before the due dates for filing the returns. The deadline for filing Income-tax returns for the Financial year 2020-21 (Assessment Year 2021-22) is as follows :-

Type of the AssesseeDue date for filing
Assessees whose accounts are not required to be audited (Salaried employees, Pensioners, people with only House property or Interest income from investments, Business cases not covered under audit)
30th September 2021
Assessees covered under audit requirements (Other than Transfer pricing cases)30th November 2021
Transfer pricing cases31st December 2021
Filing belated (or) revised returns31st January 2021
Filing tax audit reports (other than transfer pricing audit reports)31st Oct 2021
Filing Transfer pricing audit report30th Nov 2021

What happens if you dont file your returns on time?

Levy of Late fees u/s. 234F

  • The first and foremost consequence of late filing is levy of Late filing fees under section 234 F for filing Income-tax returns belatedly.

The late filing fees payable is as under

Filing dateTotal Income below 5 lakhsTotal Income above 5 Lakhs
Upto 30th Sept 2021NilNil
1st Oct 2021 to 31st Dec 202110005000
1st Jan 2022 to 31st Mar 2022100010000

Carry forward & Set off of Losses

If you have any losses under any head of income and you are filing your income-tax return after the due date, you wont be able to carryforward the losses and set off the same against your income in the subsequent years. However, House property loss can be carried forward.

Interest on Late filing of Returns under Section 234A

Another additional burden for late filing is levy of Interest @ 1% per month on the final tax payable , if the filing is not done on or before the last date for filing returns.However if your final tax payable is NIL or refund, this interest will not be levied.

Delay in Issue of refund due

Going by the past experience, refunds due , if any , will be first issued to cases where the income-tax return is filed on or before the due date. The issue of refunds for belated returns will normally get delayed. Hence it is better to file your returns on time.

Benefits of filing your Income-tax returns on time

Loan application and approvals

If you are applying for any loan (Housing Loan, Vehicle Loan, Personal Loan etc.,) filing your returns on time will give you a weightage in processing the loan applications. Moreover for businesses enjoying credit facilities with banks and financial institutions, the timely submission of returns and financial statements will ensure seamless continuity of their existing facilities.

Carry forward of Losses

If any of the Heads of Income is loss (or) your final income declared is a “Loss”, filing your returns on time will entitle you to carry forward such losses to the subsequent year and you will be able to set off the losses of the current year with the profits earned in the subsequent years. If the returns are filed belatedly, you wont be able to carry forward your losses.

Additional Interest on Refund

If the returns are filed on time, the refund due payable to you will be entitled to Interest on refund from 1st April of the Assessment year onwards. However, if the return is filed belatedly, the interest on refund will be calculated only from date of filing and not 1st April.

For example for the Financial year 2020-21, if there is a refund due and you have filed your return before due date, interest will be calculated from 01st Apr 2021 till the date of issue of refund. If you file your return belatedly, say 31st Oct 2021, Interest on income-tax refund will be calculated from 31st oct 2021 only. You will stand to lose interest from 1st Apr to date of filing. 

Hence it will be beneficial to you if you file your returns on time.

Avoid Penalty & Prosecution

Filing return of income will ensure that you avoid penalty & prosecution by Income-tax authorities and ensure peace of mind.

Income proof

Your filed Income-tax returns and Financial statements will serve as an Authentic Proof of your Income. This can be useful more particularly to establish your income for the purposes of Loans from banks & financial institutions , Government Tenders, Mergers & Collaborations and registration as a Vendor with multinational corporations.

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5 thoughts on “Filing your income taxes on time can actually help you save money. Find out how..”

  1. YOU ARE HELPING A LOT FOR BEGINNERS AND PEOPLES LIKE US USE TO SPREAD GUIDELINES THIS WORK OF YOURS IS REALLY PRAISEWORTHY. MY REGARDS TO YOU

  2. Sir, I hope 234F late fee can be only upto 31/01/2022 and not upto 31/03/2022 . Correct me if I am wrong.

  3. An NRI has NRO account in an Indian Bank. His total income (only this interest) is less than the basic exemption limit. He wants to submit a return voluntarily for getting refund of TDS collected. when he tries to submit return for AY 2021-22 under new portal he has to click the provision under which he has to submit the return. what provision has he to choose. He cannot click the item as it is not, it is actually less than basic exemption limit.” Less than 2 months are available for submission and request early solution. thanks.

  4. Thanks for your inputs sir. I believe its only for the AY 2020-21 for which 31st Jan 2021 was set as deadline.

    For AY 2021-22 i dont remember any extension was provided. If so request you to share so that we can update here

  5. On the basis of the facts shares by you, prima facie, you can select return under section 139(1)

    If you have any high value transactions you need to select Section 139(1) Seventh Proviso.

    The provisions of section 139(1) seventh proviso is as under

    The newly seventh proviso inserted to Section 139(1) of the IT Act may be read as under-

    “Provided also that a person referred to in clause (b), who is not required to furnish a return under this sub-section, and who during the previous year—

    (i) has deposited an amount or aggregate of the amounts exceeding one crore rupees in one or more current accounts maintained with a banking company or a co-operative bank; or

    (ii) has incurred expenditure of an amount or aggregate of the amounts exceeding two lakh rupees for himself or any other person for travel to a foreign country; or

    (iii) has incurred expenditure of an amount or aggregate of the amounts exceeding one lakh rupees towards consumption of electricity; or

    (iv) fulfils such other conditions as may be prescribed,

    shall furnish a return of his income on or before the due date in such form and verified in such manner and setting forth such other particulars, as may be prescribed.”

    Our advice is to provide the complete information to a tax professional and get it filed.

    Thanks

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