Most of the salaried taxpayers pay tax which gets deducted from their salary via Tax Deducted at Source (TDS), well before the March 31 deadline.

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However, several times you may forget to file your returns ahead of the deadline, and it's usually too late by the time you realise it.

But there is no need to panic. This is because tax laws are not too stringent when it comes to filing income tax returns.

Being a salaried person, you may not have filed your taxes by July 31 i.e. the due date for filing tax returns (for taxpayers who are not supposed to get their accounts audited), but if you have an income on which all the taxes have been deducted or have been deposited by way of advance tax, you do not need to worry.

For example, the last date to file the return for FY15 was July 31, 2015, which was later extended.

If you have failed to file your tax returns for last year, then you can still file them without any additional penalty or interest. This is because, the law allows you to file returns within a period of two years from the end of the relevant financial year. For example, you can file tax returns for FY15 (Assessment Year 2015-16) till March 31, 2017.

However, you will have to act now because the due date for filing tax returns for FY16 is July 31, 2016. Which means, you will now have to file returns for two years -- one for the last year and second for the current assessment year.

Rules: If you have any business or capital loss to be carried forward, then the same cannot be carried forward to the next year if the return of income is not filed before the due date. However, loss from house property is an exception which can be carried forward even if you don't file returns by July 31.

The implications of not filing your returns on time and how to correct it:

Scenario 1: You do not have outstanding tax liability

If we talk about the above example of FY15 where you have already paid your taxes on or before March 31, 2015, but could not file the return within the due date i.e. July 31, 2015 (last date was extended to September 7, 2015) you may still file the returns at any time before the end of two years from the relevant financial year, which, as mentioned above, will be by March 31, 2017.

But this may invite a tax penalty of Rs 5,000 under section 271F even if all your taxes have been paid but you fail to file the returns within one year from end of relevant financial year i.e. March 31, 2016. But this is totally discretionary and may be levied in rare cases. So you still have time to file last year's tax returns if you act fast.

Scenario 2: You do have some outstanding tax liability

If you still have any outstanding taxes to be paid (after deducting TDS and advance taxes paid) you will be liable to pay a simple interest at 1% per month or part of the month under section 234A apart from the interest under section 234B and C. This amount will be payable on the outstanding tax amount starting from the due date till the date of filing the return.

It's always a good practice to file returns on time but there's no real need to worry if you haven't been able to file your returns due to certain unavoidable circumstances. That is, if you don't have any outstanding tax liability. But if you have losses to be carried forward, which are significant, then not filing returns may become an issue.

Rishabh Parakh is a Chartered Accountant and the Chief Gardener & Founder Director of Money Plant Consulting, a leading Tax & Investment Planning Advisory Service Provider. He also runs a personal finance blog called “Mango Investor” aka AAM Niveshak at www.mangoinvestor.com . Readers are invited to send their feedback to rishabhparakh@moneyplantconsulting.net