Every year there are some people who for some reason are not able to file their income-tax returns (also referred as ITR) by July 31, even though they have four months time to do so.
If you are among those few who have not managed to file their returns, then don't get too worried. There are still ways to solve your problem. The final due date for the same is till March 31, 2013; although a penalty will be levied for filing late, depending on the status of the tax payment.
Scenario 1: Tax is paid. No need to worry in this case, as you can file the ITR till March 31, 2012. But if you push this deadline to March 31, 2013l then a fine of Rs 5,000 can be imposed on you. The final amount for the penalty will be on the discretion of assessing officer.
Scenario 2: Tax is not paid. For those who have not paid the taxes will be pay a penalty of 1% per month for number of days or month after July 31. If the tax due is more than Rs 10,000, then you were supposed to pay advance tax in three tranches, hence, the 1% penalty per month will be applicable from the period you have not paid the tranche.
Advance tax -- Tax payment deadline
30% of tax assessed Sep 15, 2010
60% of tax assessed Dec 15, 2010
100% of tax assessed Mar 31, 2011
Error in Form 16
There is also a possibility that your employer may have made an error in Form 16. The best course of action under this situation is to file ITR using the form 16 received first. Then get it corrected and then file the revised return.
To delay the ITR in order to get the correct Form 16 may lead to some hassle as the assessing officer may not believe your claims and thus penalize you.
Cash crunch and Tax payment
If you don't have money to pay tax, then the better idea would be to borrow and pay rather than paying late. There are two reasons for this. First, interest payable to the Income Tax Department is higher compared with the market rate, according to a charted accountant. The second reason is, that habitual late-filers fall under the scrutiny of IT lens and such people are blacklisted.