FILING TAX RETURNS IN AUGUST 2013

[Dr. Sanjiv Agarwal]

Generally August month of any year is considered to be a relaxed month when you relax after filing you income your income tax returns, enjoy the rainy weather and green fields and scenic beauty all around. In Jaipur, the picnic and get togethers add fun to the celebration.

But August this year is a bit different and demanding in the sense that it made you file your annual income tax return latest by 5^th August, 2013, the date which was extended looking to unmanageable last minute rush for filling tax returns for the assessment year 2013-14 in last week of July. This time, pressure was two fold – firstly there was a sharp rise in filing of income tax returns on line (i.e., in electronic mode). Thanks to the compulsory online filing made a law for all those with income of more than Rs. five lakh. Further, there was a rush for physical filing of returns by employed assessees as the exemption in case of returns upto Rs. five lakhs provided to them last year was not continued for the current assessment year. This resulted in rush at all income tax offices. In such cases, online filing of returns was not compulsory. All such income tax returns were to be filed upto 5^th August, 2013 as the last date has not been further extended. Those who have not yet filed the return may even do so now if no tax is due otherwise they will have to pay 2 percent per month of tax due as penalty, besides losing the right to revise the returns or to carry forward the loses and department forfeiting the interest on refund due, if any.

The returns can be filed even now as in income tax, belated returns are allowed to be filed subject to levy of interest and penalty. However, delayed returns also result in delay in processing of refunds and forego interest for the delayed period.

Again, an unusual month for filing service tax returns, it has been notified that all service providers and service tax assessees must file their half yearly Service Tax returns in form ST-3 for the period October, 2012 to March, 2013 latest by 31 August, 2013. This is an extended deadline which is generally 25^th April for the same period. In case of Service Tax also, online filing of Service Tax returns has been made mandatory for all assessees - big or small, unlike income tax. The utility for filing online Service Tax returns is available on government's website of Central Board of Excise and Customs.

In case of Service Tax, such return is required to be filed by all service providers including service receivers in select cases and importers of services under reverse charge mechanism. Such return would also be first return for full half year since the introduction of negative list approach from July, 2012.

Non filing of Service Tax returns online attracts penalty as also delayed filing attracts penal provisions.

It is therefore, desirable to file your both tax returns - income tax (if not filed till now) and service tax well within time in August before you get ready to have freedom to celebrate independence day later during the month. Sooner the better.