Budget 2017: Do you know these changes in income tax return filing process? 

Changes ensure that income tax reporting happens earlier than what it used to be. Balwant Jain (more) Company Secretary, Bombay Oxygen | Capital Expertise: Tax ,Property Balwant Jain This government is focussing on early reporting of the income by the tax payers for facilitating the decision making.  And with this aim in mind has been proposing changes in the income tax law with respect to various aspects of filing of the income tax return. In good old days one was allowed to file income tax returns for previous two years.  The previous year’s budget has reduced this to one year. So beginning from 1st April 2017 you will be able to file your income tax return for one  year. For the previous year ended 31st March, 2017 you should be filing your income tax return by  31st March 2018. This year’s budget has proposed various changes keeping this aim of early reporting of income by the tax payers in mind. Let us discuss the provisions which are applicable to the Individual tax payers

 Mandatory payment of fee for delay in filing of your income tax return Hitherto the Income Tax Act provided that in case you were required to file  your income tax return under Section 139(1) and failed to file the same before end of the assessment year, the income tax officer could levy a penalty of Rs. 5,000 for such failure after giving you adequate notice to explain your case.  With amendment of law from the last year’s budget you cannot file your income tax return beyond the end of the assessment year, the penalty provisions became redundant. Moreover the levying of penalty was not automatic and in my experience of 35 years I have not come across even a single case where such penalty was levied.  So in order to ensure that the tax payers file their income tax returns by the due date which is generally 31st July for the average tax payers, this year’s budget has proposed to levy a mandatory fee for such delay in filing of your income tax returns beyond the due dates. 

The amount of fee, however, would be restricted to Rs. 1,000 in case your taxable income did not exceed Rs. 5 lakh for the year. This mandatory fee has to be paid as self assessment before filing of the income tax return without having to wait for any communication from the assessing officer.   It may be interesting to note that the fee is not payable in case your income does not exceed the basic exemption limit before giving the effect of deduction and exemption as explained above as you are not required to file the return of income but are allowed to file the same.  This will result into additional revenue for the government in the form of fee instead of penalty which did not bring any substantial revenue for the government.

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