Belated Income Tax Returns: What are the losses?

* * In fact, tax payers are allowed to file belated returns for two preceding financial years, even after the deadline. That is, if you have missed the deadline this time (July 31, 2014), you can complete the process by March 31, 2016. But, you might have to pay a penalty of Rs. 5,000 if you file returns after March 31, 2015.

* * However, if income tax payers are able to demonstrate that they have a reasonable cause for the failure to file income tax returns during the assessment year (before March 31, 2015), they can make a case for non-levy of penalty.

* * It is best to complete the exercise as soon as possible, as you will have to pay a penal interest of 1 % on the income tax payable, if any, for every month of delay, that is 12% interest of a year.

* *Timely filing will also result in quicker processing of refunds due to you.

* * Many a time, tax - payers make mistakes while filing returns and notice the errors much later. In such cases, the cushion to file revised returns helps. However, this won't be the case if you miss the deadline. You are not allowed to file a revised return if you complete the process after July 31

* * Moreover, if you fail to file returns before the due date, you will have to forgo the benefit of carrying forward losses incurred under the head `Capital Gains' &  `Business Losses (other than depreciation loss)'.

* *Delayed filing of return could also mean having to let go of interest due on tax refund, if any, from the income tax department.

* *If you are filing the returns after July 31, you need to take extra care to ensure your return is error-free. Unlike in the case of filing it on time, you will not get an opportunity to rectify your mistakes later. Therefore, before you get started on the process, gather all the relevant documents like Form-16, bank statements, receipts issued by non-government organisations (NGO) or / political parties to whom you may have donated money and last year's return.

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