File a tax return if income exceeds specified threshold

If a tax return has not been filed or has been filed incorrectly, then a belated return or revised return can be filed


Pradeep Gaur/Mint
Pradeep Gaur/Mint

I have been irregular in filing my income tax returns for some years. Also, at times, I have not paid tax on my other income such as that from interest. What is the time frame within which the income tax (I-T) department can audit my financials or question me?

—Dipankar J.

It is mandatory for an individual whose total income exceeds a specified income threshold or holds assets outside India to file her tax return for the respective financial year (FY) within the specified due date.

If the accounts are required to be audited under any law, the specified due date is 30 September of the following FY; in any other case, it is 31 July of the following FY.

If a tax return has not been filed or has been filed incorrectly, then a belated return or revised return can be filed. A tax return filed after the specified due date is considered as a belated return. The specified time frame for filing a belated or revised tax return is either before the expiry of two years from the end of the relevant FY or before the completion of assessment, whichever is earlier.

If the taxes have not been entirely paid, there could be interest implications on account of delay in the payment of taxes and filing the tax return within the specified due date.

Further, a penalty of Rs.5,000 may be levied at the discretion of the tax officer for non-filing of tax return within one year from the end of the FY. Also, there are several other penal consequences that could arise from defaulting on timely and accurate filing of tax returns.

If a belated or revised tax return cannot be filed, it may be advisable to at least pay the taxes on your other income along with interest to substantiate your bona fide intention and mitigate penal consequences.

Furthermore, if the tax officer has reason to believe that any income chargeable to tax has escaped assessment, she may assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to her notice subsequently in the course of proceedings.

The time limit for issue of notice for reassessment ranges from five to seven years from the end of the relevant FY, depending on the quantum of the income that has escaped assessment.

Also, in a case where income relating to any asset (including any financial interest in any entity) located outside India has escaped assessment, the time limit for issue of such a notice is 17 years.

The tax officer has one year’s time from the end of the FY in which the above notice for reassessment has been issued to complete the audit.

Accordingly, the tax officer has time of six to eight years following a particular FY to audit your financials or question you, where income has escaped assessment (this time limit would be 18 years if you have any income from assets held outside India that has escaped assessment in any FY).

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