Why not miss 31 July deadline of income tax return filing

Kamal PoddarChoice Group July 31 is round the corner and the deadline to file income tax returns is here. While there are options to file the income tax returns after the stipulated date, there are several concessions that an individual assessee has to forego.These include levy of interest at 1% per month on amount of tax payable after adjusting amount of TDS / Advance tax paid and also sacrifice the option to file a revised income tax return in case of any mistake in the previous one that was filed. For assessee failing the July 31 deadline, will also not be able to carry forward the losses under the head business and profession and capital gains and will not be able to take the deduction of loss of preceding years against their future income, if the return is not file this month before the due date.Moreover, it is within the discretion of the assessing officer to levy a penalty of Rs 5,000 for not filing returns by the end of assessment year.As per the prevalent norms for filing returns, every person (individual/HUF) who earns income from salary, pension, rental income, interest income, commission income, tuition income, capital gain, business income (turnover from business is less than 1 crore or receipt from profession is less than 50 lakh) etc is required to file his return of income on or before the due date i.e. 31st July 2016(For Assessment year 2016-17)Further, obligation to file return is only on those persons whose gross taxable income (before claiming tax saver investment deduction) from any of the above sources exceeds the basic exemption limit (i.e. 2,50,000 for non-senior citizen assesse).Further, income tax department put obligation to file return online for those person, whose Income• exceeds Rs.5,00,000/- or• any refund is claimed in the return of income.However, income tax department has given relaxation to tax payer of age of 80 years or more from online filing subject to certain conditions. After filing return of income online (without digital signature), you have to verify your return using any of the option mentioned below:- • Send the signed ITR V to income tax department-CPC Bangalore, within 120 days after filing of your return.• E-verify by E-verification code on mobile & Email (If the taxpayer’s income is less than 5 lakhs and if there is no refund)• E-verify by using net banking (for selected notified bank)• E-verify using Aadhar card (if mobile no. provided to e-filing website is linked with Aadhar)• E-verify by ATM (only for SBI Customers)In the era of big data analytics, the income tax department and the assessing officers are well equipped to compile transaction details of individual tax payers through various sources like cash deposit in saving account (in aggregate exceeding Rs.10 lakh), sale or purchase of Immovable property (for Rs.30 lakh or more) etc, based on which it can issue the notice of non-filing of return of income or filing of inaccurate particulars of income.In other words it could be an error beyond repair because if there is a slip-up in the tax liability, the assessee would not be allowed to rectify the same. But one can revise it provided he or she has adhered to the filing deadline of July 31. While there is no penalty for voluntarily filing a revised return in case one has filed it before July 31, but there could be a hefty one for under-reporting your income after the July 31 deadline.However, the tax department has offered an exception in case of income chargeable to tax under the head Income from house property. The losses incurred on house property (on account interest payment) can be carried forward to following financial years even if the return has not been filed by the due date of July 31.Let us try to understand above rule with one example. Let us assume, Satish is the owner of two house property (one in Mumbai and another in Pune). During the FY 2015-16, Satish sells property in Pune for Rs.50 lakh bought in the past for Rs.45 lakh. The loss of Rs.5 lakh is chargeable to tax under the head income from capital gain. But since he filed his return of income for FY 2015-16, after 31st July 2016 so he will not be able to carry forward said loss. Further in FY 2016-17, Satish is again in need of money and he plans to sell property for Rs.1 crore, held in Mumbai, which he bought in the past for Rs.95 lakh. This time he makes a capital gain of Rs 5 lakh but is not in a position to reinvest the amount of capital gain in another property to save tax. In such case, Mr.X has to pay tax @20% on capital gain of Rs. 5 lakh, after accounting for indexation). If Mr.X had filed his return for FY 2015-16 by 31st July 2016, he would have been able to save 20% or Rs 1 lakh tax on said capital gain in FY 2016-17.