Can an NRI still file Income Tax Return for Financial Year 2020-21?

With our to-do list overflowing every day and procrastination being our best friend, we often tend to miss most deadlines. In the world of taxation, the due date of filing returns happens to be the one that puts up a hard chase. Although the dates are declared well ahead, people end up praying for an extension until the last minute and for most, despite their best efforts, technology itself may prove to be a barrier in meeting the deadline.

What are the due dates for filing returns?

Until COVID-19 took over the planet, the original due date for filing Income Tax Return for individuals was 31st July of the year following the financial year end and 31st October for taxpayers whose accounts are subject to tax audit. Returns filed beyond these dates would be termed as belated returns and such returns can be filed up to 31st December.

Financial year 2020-21

Due to the pandemic scenario and further problems arising due to the new income tax portal, for financial year 2020-21, the original due dates for filing Income Tax Return were extended to 31st December 2021 and 15th February 2022 for individuals and taxpayers liable to tax audit respectively. Any return filed beyond this date for the financial year 2020-21 would be treated as a belated return. The extended due date for belated return is now 31st March 2022

Are there any charges for filing belated returns?

It is wise to remember that belated returns in income tax can earn you a late fee.

Earlier, the late fee levied on belated returns were up to INR 10,000 based on your income. As per the changed rules that has been brought forward under belated return section 234F of the Income-tax Act, 1961, the amount of late fee chargeable on a belated return has been lowered to INR 5,000. As a relief to small taxpayers, the Tax Department has further lowered the late fee to INR 1,000 if your total income is not more than INR 5 lakhs.

In addition to the late fee, missing to meet the deadline shall take away from you the benefit of carrying forward any losses for set off against income of future years. There will also be interest payable for filing belated returns.

What is the interest chargeable on belated return for AY?

As per section 234A, if you have failed to file returns on the due date, you shall be required to pay interest at the rate of 1% for every month or part of the month, on the tax amount that remains unpaid. 

How to file belated returns?

The process involved in filing a belated return is exactly the same as that of filing a return within the due date. It only needs to be noted that the return filing section needs to be mentioned as belated return (Section 139(4)) in the return form.

Can belated return be revised? What is the timeline for filing revised returns?

Yes. Belated returns are also eligible to be revised, much like returns filed on/before due date.

Currently, the timeline for filing revised return is the same as belated return, namely, 31st December of the year following the financial year end. Hence, any return already filed by an NRI can be revised within 31st December. For financial year 2020-21, this due date has also been further extended to 31st March 2022.

In order to encourage voluntary tax compliance, the time limit for filing tax returns has been proposed to be broadened. Until Budget of 2022, taxpayers were allowed to file revised and/or belated returns until 31st December of the year following the financial year end. Budget 2022 has proposed to introduce a new sub-section 8A in section 139 of the Act wherein taxpayers shall now be given two years from the end of relevant assessment year to disclose any income they have missed to include in the returns filed earlier. However, an additional tax shall be levied on the newly disclosed income. 

An additional tax of 25% per year is bound to be levied if taxpayers file a belated return within a year from end of the relevant assessment year. The rate shall climb to 50% if the return has been filed after one year but before two years from the relevant assessment year. This tax shall be levied on the differential income tax payable.

All these penalties, interests and even extended timelines has been put in place to encourage timely filing of returns and deter tax evasion. There are countless platforms that provide easy filing of returns, making the process completely hassle-free. PravasiTax has tailored packages that help you file timely returns at your ease and comfort. Click here to view our return filing plans.

As the saying goes, better late than never. So file today! 

Disclaimer: The views / the analysis contained therein do not constitute a legal opinion and is not intended to be an advice. Readers of this document are advised to seek their own professional advice before taking any course of action or decision, based on this document.

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