Income Tax Return: You can save Rs 150,000! Here's why audit, filing deadline is important

Income Tax Return: The government of India recently extended the deadline for filing income tax returns and the audit report for financial year 2017-18 to October 15. The decision was taken by CBDT after it received representations from stakeholders seeking extension of the last date for filing of income tax returns by taxpayers whose accounts had to be audited. 

In a statement, CBDT had said, "The Central Board of Direct Taxes extends the due date for filing of ITRs as well as reports of audit, which were needed to be filed by the said specified date, from Sept. 30, 2018 to Oct. 15, 2018 in respect of the said categories of taxpayers." The statement further said that there shall be no extension of the due date for the purpose of section 234A (Explanation 1) of the I-T Act, 1961.

Section 234A (Explanation 1) of the I-T Act, 1961 pertains to interest for defaults in furnishing return, and the assessee shall remain liable for payment of interest as per provisions of section 234A of the act, it added.

Why October 31 deadline is important

According to Nazali Ansari, Tax Associate, TASS Advisors LLP, failing to file tax before the deadline will result in penalties up to Rs 1,50,000, or Rs 0.5% of the total turnover. 

"The deadline to file income tax return for corporate/individual assesses who are required to get their accounts audited under the Income Tax provisions is extended until 31 October for Assessment Year 2018-19. It is important to file the return along with the tax audit report before the due date to avoid any interest and penalty provisions to be triggered," Ansari told Zeebiz.com.

"Non filing of tax audit report by 31 October shall trigger significant penalties amounting to Rs. 150,000/- or 0.5% of gross turnover whichever is lower.  However, where the taxpayer is subject to transfer pricing provisions (on account of related party transactions), the due date is 30 November 2018," he added. 

According to a CBDT data released earlier, over 5.29 crore income tax returns were filed by individuals before the end of their deadline on August 31. This was 60 per cent more than the previous year. Officials said that the Income Tax Department received over 22 lakh returns, largely over the online or e-filing mode, in a single day today till 7 pm.