Before 31st Dec’ 2024 ends – Tax Compliances checklist
Ah, December. The month of cold festive cheer, last-minute gift shopping, and…tax deadlines! Yes, while you’re decking the halls, don’t forget to deck your tax checklist. While March might steal the limelight in tax planning, December isn’t playing second fiddle anymore. So, grab a cup of coffee and let’s know about it. December 31, 2024, is a biggie for taxpayers who need to file their belated or revised Income Tax Returns (ITR). Even businesses and firms with zero activity for the year have to file. Let us know about the compliance checklist for 31st Dec-24.
1. Direct Tax VSVS – 2024 Scheme – Time to put an end to Tax Disputes:
If taxpayers have any tax dispute pending before the appellate authorities, Government’s “Vivad Se Vishwas Scheme” (VSVS-2024) is like a peace treaty which can be used optimally before 31stDec-24, as under:
a)Avail & Pay up by December 31, 2024 and taxpayers can save 10% on tax disputesand 5% on penalty-related appeals.
b)Miss the deadline & taxpayers would be back to square one—slogging through litigation (or potentially paying more till 31stMarch 2025).
2.Belated Income Tax Return – Section 139(4) – Better late than Never:
Missed the original ITR deadline? Don’t panic—December 31 is the second chance to file. Sure, there’s a late fee (Rs 5,000, or Rs 1,000 for incomes below Rs 5 lakh), but it’s a small price to pay compared to alternative costs which one incur otherwise. Earlier, taxpayers were allowed to file ITR till 31stMarch. However, considering the advancement of the technology and electronic mode of information availability, the time period has been reduced by 3 months to December. Belated or late filings of ITR have consequences not only in terms of monetary penalty & fine but also by way of denial of various benefits & incentives, as under:
i. If taxpayers have incurred a loss during any year, they are allowed to carry forward such loss for set off against subsequent year income. However, this benefit of loss carry forward is available only if ITR is filed within the due date. If the ITR is filed after the due date then the benefit to carry forward the loss is lost except in respect of loss from house property.
ii. Belated Return results in denial of the benefit of deduction u/s 80HH to sections 80RRB, u/s 80IA, IB, IC, etc. Similarly, the benefit of application of income to the charitable trust is available only if the ITR, audit report in Form No. 10BB/10B, other declarations regarding accumulation etc. are furnished within a prescribed time period. Delay in filing results in the denial of the benefit.
3. Revised Return – Section 139(5) – Fix Those Oops Moments:
There are instances wherein taxpayers have forgotten to add the fixed deposit interest or have escaped to incorporate capital gain transaction or other income reporting. Don’t sweat it—December 31 is also the last day to revise your return.
Why revise?
i. To add overlooked income (because ignorance isn’t bliss for the taxman).
ii. To claim unclaimed TDS credits (who leaves money on the table?).
iii. To correct any other genuine errors, like typos or missed deductions.
As far as revised return is concerned, one may note as under:
· No late fees (hooray!).
· One can revise any number of timesuntil the deadline.
· One can revise even if the original return was processed or a refund has been issued.
4. Updated Income Tax Return – Section 139(8A) – The “Oops, I’m Late Again” Option:
If taxpayers could not meet even the belated or revised deadlines, there’s the Updated Return (ITR-U)option albeit with a cost.
Conditions to file ITR-U:
· It’s allowed only if the taxpayer is paying more tax. No benefit of refunds, carry forward losses, or reduce the tax bill is available in the updated return.
· Additional tax applies: 25% extraon tax dues for filings within 12 months, and 50% extra for filings beyond that.
Remember, this is a one-shot deal. Once filed, taxpayers can’t re-file an updated return for the same year.
· There are certain categories of taxpayers who are barred from filing the Updated Return. Taxpayers in whose case income tax raid has been carried out or where income tax survey (Other than TDS survey) has been conducted or in case any proceeding for assessment or reassessment or re-computation or revision is pending, etc are not allowed to file the updated return.
Disclosure of Foreign Assets in the ITR:
There is a penalty if the foreign assets are not disclosed in the ITR forms. Taxpayers may note that the same is required to be disclosed in the original or belated or Revised ITR. Updated returns may not enable taxpayers to get immunity of non disclosure of Foreign Assets.
31ST Dec File & Smile:
In tax matters, earlier the better. Filing on time or fixing mistakes saves money, stress, and potential legal headaches. So, revisit your ITR for FY 2023-24 & revise it if required as there is no better time than now to file that belated return. Happy filing and May your December 31 be stress-free!
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