Avoid interest liability

There is some amount of interest that is levied if the return is not filed prior to the due date. According to the Income tax Act, 1961, there are various other interest that can be levied if the tax return is not filed on time.

Vineet Agarwal says, “As per Section 234A of the Act, an interest is levied at 1 percent per month on the tax payable, from the due date of filing the return to the actual date of filing, subject to certain conditions. Hence, filing the return within the due date can help avoid this interest liability.”

Thus the due date for filing tax return for 2011-12 is July 31 but the belated tax return can be filed up to March 31, 2014. Amarpal Chadha says, “Revenue authorities have the powers to levy a penalty of Rs 5,000 if the tax returns are not filed within March 31, 2013 (penalty can be levied for the returns filed between April 1, 2013, and March 31, 2014).”