Rohit is employed at a private firm. He failed to file his tax returns on time in year 2008-2009. So what should he do? How can he save himself? Here is what he should do:
Usually July 31 is the last date for filing tax returns. It is important to file the returns on time in order to avoid paying penalty.
Besides, it is a mandatory requirement of the government. Any person whose gross salary exceeds the basic exemption limit is required to file his income tax returns.
But as Rohit failed to file his returns on time, he has the alternative of filing his tax returns till March 31, 2010.
Here there are 2 cases.
Case 1: If Rohit's tax was deducted at source, then he can file his tax returns by March 31 without paying any penalty. For this, his sole source of income should be his salary.
But if he still fails to file his tax returns, then he can do so till March 31, 2010. This can be done without having to pay any penalty.
But if Rohit fails to keep this date, he is still eligible to file his returns by March 31, 2011. But this will come with a very high fine of Rs 5,000.
Case 2: Now assume Rohit has some other sources of incomes like rental income, dividends for shares etc. In this case, he can still file his returns by March 31, 2010. But he will be penalized 1% per month if he continues to delay.
For example, if Rohit's unpaid tax liability is Rs. 5,000. Instead of paying this amount by July 31, he pays it on November 30, he will end up paying Rs 200 as penalty.
However, this is applicable only to salaried employees.
In case you are not a salaried person and you have suffered a loss in business or capital gains and intend to take it forward to the next year, it is not allowed. Hence, it is important to file your returns by due date.
