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You can always modify your return if you file it before the deadline and will not lose out on several benefits
While the tax filing deadline has been extended by a month, many taxpayers may still miss it. Some won't bother because all their taxes have been paid and they only have to file their return. Since this can be done till the end of the relevant assessment year (31 March 2013) without incurring any penalty, they can take it easy. Others will miss the last date because they don't have all the details required in the tax form. However, this may not be a wise move.
If you don't file by the due date, you forego some of your rights as a taxpayer. For instance, if you file your return by the due date, you are allowed to modify it any number of times till the time of assessment. If you file it after the due date, you cannot revise it. This can be a costly error because if there is some miscalculation in your tax liability, you won't be allowed to rectify the mistake. This is not such a big problem if you have missed out on some deduction for which you were eligible. All you stand to lose is a few thousand rupees you paid in excess tax.
What happens if you underestimate your tax liability because of a miscalculation, say, forgetting to include income from other sources? You can revise your return only if you adhere to the filing deadline. There is no penalty for voluntarily filing a revised return, but there could be a hefty one for under-reporting your income.
Carry Forward Losses
There are other benefits that you stand to lose if you miss the deadline. Income tax laws allow you to carry forward some of your losses for up to eight financial years. These losses can be set off against capital gains made in the future. However, you won't be eligible for this benefit if you don't file by the due date. The exception is in case of a house property. The loss incurred by selling a house can be carried forward to subsequent financial years even if the return has not been filed by the due date.
Are You Exempt From Filing?
There are many taxpayers who are under the impression that they are exempt from filing returns because their annual income is less than 5 lakh. This exemption comes with several conditions. It is only for salaried taxpayers who have income from one employer and bank interest. If you changed jobs during the year, or have some fixed deposits, capital gains and rental income, you will have to file your return.
Besides, the taxpayer is not eligible for exemption if the income from savings bank interest exceeds 10,000. Also, the individual should have reported the entire income, from bank interest to his employer, and tax should have been deducted on it and mentioned in Form 16.
If you have doubts, it is best to be on the safe side and file your return. It doesn't require too much effort but you stand to gain a lot. For one, your return is a declaration of your income and will come handy when you seek a loan for a vehicle or a house. It is also useful because foreign countries don't want potential immigrants and insist on seeing your tax return before issuing a visa.
Filing tax return is especially important if you intend to buy property. In most states, registration of immovable property requires one to produce tax returns for the past three years.
File Now, Modify Later
If you have not filed your return till now, get going right away. Even if you don't have full details, file the original return before 31 August so that you don't lose out on the benefits mentioned earlier. You can then file a revised return later with all the missing details. Keep in mind that you can file a revised return only if the assessment has not been completed. To ensure this, it is best to file online. Your online return doesn't get processed till you send the ITR V to the Central Processing Centre in Bangalore. You can do this within 120 days from the day of filing the return. This means that you will have enough time to gather all the documents and details, and file a revised return
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