Individuals primarily with salary income and certain other tax payers were required to file their tax returns by July 31, 2010, for the financial year 2009-10 (assessment year 2010-11). As per the recent press release, the Central Board of Direct Taxes (CBDT) extended the due date of filing income tax returns to August 4, 2010. This was done in view of some technical snags in e-filing and adverse weather conditions at a few locations due to which tax payers faced some difficulty in filing or uploading the files. This provided an opportunity for a few more days to keep date with the taxman. Still, there may be many instances where due to various reasons, the tax payer may not have been able to file his taxes by August 4, 2010.

Belated tax return

As per the provisions of the Income Tax Act, 1961 (the 'Act'), a tax payer who has not filed his tax returns within the due date or as per the time specified under a notice issued to him by tax authorities, may do so for a financial year before the expiry of one year from the end of relevant assessment year or before the completion of assessment, whichever is earlier.

Thus, in case a tax payer has missed his due date of filing his returns by July 31 - the extended date of August 4, 2010 - for the financial year 2009-10, he could still file his tax return by March 31, 2012.

Penalty for non-filing

If a tax payer fails to file his returns before the end of the relevant assessment year, then tax authorities may impose a penalty of `5,000. Therefore, it would be prudent for the tax payer who has missed the deadline to file his returns latest by March 31, 2011, to avoid any penalty.

Revised returns

Furthermore, there may also be instances where returns have been filed by the due date and subsequently, the tax payer finds some error in the same. In such an event, he may file revised returns any time before expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.

Defective returns

It is also possible that certain errors are observed by the tax department in the filing. Thus, where such authorities consider that returns of income are defective, they may intimate the anomaly to the tax payer and give him a chance to rectify it within 15 days from the date of such intimation or within such further period as may be specified. If the tax payer fails to right the wrong, then the returns filed by him shall be treated as invalid and the provisions of the Act shall apply as he has failed to file his tax returns.

Caution point

In order to avoid any penalty for not submitting files on time, the tax returns should be filed before the end of the relevant assessment year i.e. March 31, 2011. It is pertinent to note that belated returns cannot be revised subsequently. Therefore, necessary caution should be exercised while filing belated tax returns to ensure that complete and correct particulars are filed.

Source: ET, Vikas Vasal, Executive Director, KPMG.