Belated Return

Belated return is filled u/s 139(4)

In case of financial year beginning 1 April 2007 and ending on 31 March 2008, the due date for filing the income tax return for individuals whose total income exceeded the maximum amount which is not chargeable to tax (and who does not have to get the accounts audited) was 31 July 2008. For those of us who managed to meet the deadline, a job well done - for others, there is no real reason for you to worry. You can still file your return which will be considered as a valid tax return, but just that is would be treated as a 'belated return'.

For the financial year ended 31 March 2008, the belated return can be filed up to two years from the end of financial year, which is up to 31 March 2010. However, there are riders attached to filing a belated tax return. Otherwise, there would be no point in the tax authorities spending so much on advertising the deadline of 31 July 2008.

If you file your return after one year from the end of financial year, that is after 31 March 2009 (for returns pertaining to financial year ended 31 March 2008), there is an exposure to penalty of Rs 5,000 depending on the discretion of the revenue authorities. This penalty will not apply if you file your tax return before 31 March 2009.

If, in any case, the return cannot be filed within the due date, and has been filed after the due date as a belated return, then these losses cannot be carried forward to future years for set-off.

Section 139(4) provides that a return which has not been furnished by the due date may still be furnished as a belated return before the expiry of one year from the end of the assessment year or before the completion of assessment, whichever is earlier. However, on any return of income that has not been filed by the end of the relevant assessment year, penalty of Rs.5000/- u/s 271F shall be levied.


The word “a return” used in S. 139(4) does not specifically exclude the return filed u/s 139(3).The word “a return” in its large connotation also includes the loss return u/s 139(3).Since loss return u/s 139(3) is required to be filed within the time allowed u/s 139(1), and S. 139(4) provides for belated filing of a return not filed u/s 139(1) or notice u/s 142(1), it can be said that loss return u/s 139(3) is also file able belatedly u/s 139(4).

But Section 80 clearly denies carry forward of loss u/s 72 or 73 or 74, which has not been determined in accordance with return filed u/s 139(3).

Section 139(3) requires filing of return for a loss within time allowed u/s 139(1), if loss is desired to be carried forward.

Therefore, while a belated loss return is allowed to be filed under section 139(4), the loss returned will not be carried forward for set off in the subsequent years' asseessments.

IMPACT OF LATE FILING

1. Interest: You will be liable for penal Interest u/s 234A @ 1% per month on the amount of tax due from the due date of filing returns.
2. Carry Forward of Losses: Losses like Business Loss (speculative or otherwise), Capital Loss (short term or long term), and Loss from owning and maintaining race horses are not allowed to be carried forward. Other losses, if any can be carried forward.
3. Deductions: Deductions u/s 10A, 10B, 80-IA, 80-IAB, 80-IB and 80-IC are not allowed
4. Revision: Late returns cannot be revised except if it is in pursuance of a notice under section 142(1)
5. Penalty: A penalty of Rs.5000 may be imposed u/s 271F if belated return is submitted after the end of assessment year (after 31-March-YYYY, e.g. for FY 2007-2008, end of assessment year is 31-March-2009)