Vidya is a young entrepreneur who started her boutique in September 2019. Since it was her first year, she did not make a profit. But business is picking up. Her Bank deducted TDS on her FD interest. Since she does not have any tax liability as such, will she miss out on anything if she files her Income Tax return after the due date of Nov 30, 2020?
1. Loss cannot be carried forward if income tax returns are not filed on time.
Since Vidya has a business loss that she needs to carry forward for set off against future business profits, she needs to file her income tax return on or before due date.
2. Excess taxes paid can be claimed as refund along with interest, only if income tax returns are filed on time.
Vidya’s Bank had deducted TDS on her interest income. Since she does not have any income in FY 2019-20, she can claim the entire amount of TDS deducted as a refund with interest on refund only if she files her income tax return on time. No interest is paid by the Income Tax Department on refund claimed through a belated return.
3. Return filed after due date attracts penalty u/s 234 A and u/s 234F.
If Vidya decides to file her income tax return belatedly for whatsoever reason, apart from loosing her Interest on refund and not being able to carry forward her business loss, she will also be liable to a penalty.
Entrepreneurs – How can we help you?
“All our dreams can come true, if we have the courage to pursue them.”
Walt Disney
An Entrepreneur begins a journey with a lot of dream and aspiration. But beyond all those “think big” thoughts, the reality is that a business requires a lot of hard work and one may not notice the warnings signs early at every speed breaker he/she passes by!
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ITR Filing – Why choose us?
Effective compliance is a key pillar for growing your finances and career/business. Tax compliance in particular could be cumbersome and at times very stressful. We help you to navigate through the maze of changes to tax laws with ease.
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