File your income tax return before August 31 to avoid paying penal fees

I am not yet ready to file my income tax return. What happens if I file the return after the August 31 deadline?

This year if you do not file the return within the due date, you will end up paying penal fees. The amount of fee would depend upon when exactly you file the return. It’s Rs 5,000, if the return is filed after the due date (August 31) but before December 31, 2018 and Rs 10,000 if filed afterwards but before March 31, 2019. The amount of fee is restricted toRs 1,000 if the total income does not exceed Rs 500,000. If you fail to file the return by March 31, 2019, you will never be able to file the return.

The change has come into play this year onwards. There are also other consequences - if you have any loss to be carried forward (except loss from house property), you will not be able to do so if you file after the due date. You will also end up losing out interest if you claim any refund in the belated return. In extreme cases, tax authorities can even invoke prosecution provisions under Section 276CC of the Income-Tax Act where there is default in filing the return subject to conditions contained therein.

Given this, it is better that you file your return before the due date, and in case any omission/error happens, you may have to revise it before March 31, 2019. Also, make sure that you pay all the taxes due, otherwise you will end up paying interest and also be exposed to other penal consequences.

How do I claim house rent allowance (HRA) exemption when filing income tax return?

If you have missed claiming HRA exemption through the employer, you can very well do so now and claim exemption under Section 10(13A). However, you should be careful to maintain all the related documentation so that in case you are questioned by the authorities later, you have all the proofs ready. The exemption is computed at lower of the following amounts. The balance amount of HRA received is taxable in your hands.

- Rent paid less 10 per cent of basic salary or

- HRA actually received or

- 50 per cent of the basic salary

Do note that the salary and rent are to be taken for the period of actual accommodation and in case of non-metro accommodation (Delhi, Mumbai,  Kolkata and Chennai) 40 per cent of the salary is to be taken into account instead  of 50 per cent.  While you are claiming HRA exemption now, this year return form specifically requires you to report the details of any such exempt allowances under the head ‘income from salary’ and ‘exempt income’. Report the HRA exemption accurately in the return form.

I changed jobs in March 2018 and have moved to a different city.  Since the I moved cities, I was not been able to get the Form 16 from the previous employer. My only source of income is my salary, and I don’t have any capital gains or rental income. How can I file returns without Form 16?

The first thing you quickly need to determine is that you do not have any tax liability. Whether your existing employer gave you the benefits of basic exemption or lower tax slabs? If so, you may have taxes to pay as your previous employer would have already given that benefit while withholding the taxes from your salary. The second thing, contact your former employer as it is under obligation to issue you Form 16  before June 15, 2018.

Assuming if you do not get Form 16 before the due date of filing the return, you can consider the amount of salary income and taxes deducted and deposited thereon by your employer from your Form 26AS•. But, you need to report the break-up of their salary - allowances not exempt, the value of perquisites, profit in lieu of salary and deductions claimed under Section 16 in the return form. These details are available in Form 16 and Form 12BA which employer issues to the employees only and if you do not have the Form 16, you need to compute these amounts and accordingly file returns with the tax department.   

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