UAE residents abroad who failed to meet the ITR deadline can still file their tax returns, but penalties will be imposed.
The Indian Income Tax Department has extended the option for taxpayers to submit a belated return for Assessment Year 2025-26. This news is particularly relevant for Indian expats in the UAE who may have missed the initial deadline.
If you find yourself in this situation, it's important to act promptly. Filing a belated return as soon as possible can help reduce penalties and avoid technical issues. However, it's essential to note that belated returns do come with their own set of implications.
To file a belated return, you can use the Income Tax portal, using your PAN, and select Assessment Year 2025-26. Choose the applicable ITR form and mark it as a belated return. Once submitted, the return must be verified either online or by sending a signed ITR-V form to the Central Processing Centre (CPC).
While belated returns do allow for the carrying forward of house property loss and unabsorbed depreciation, most other losses, including capital losses, cannot be carried forward. Additionally, filing a belated return triggers penalties under Section 234F.
If your income exceeds Rs500,000, a fee of Rs5,000 will be charged. However, if your income is Rs500,000 or less, the penalty is limited to Rs1,000. It's also worth mentioning that interest may be added under Sections 234A, 234B, and 234C if there is unpaid or short-paid tax.
It's important to note that timely compliance is crucial. Missing the deadline can increase tax liability and may complicate practical matters such as loan applications, visa processes, and financial documentation. Refunds usually take longer for late filers.
When it comes to filing a belated return in the UAE, Indians themselves or their tax representatives must coordinate with the UAE Federal Tax Authority or the relevant tax authority in the UAE that handles individual tax matters. The process for filing a belated return is similar to filing on time, but coordination with the UAE authorities is necessary.
Lastly, it's worth mentioning that belated returns are more likely to attract scrutiny from the Income Tax Department. Deductions under the old tax regime, such as HRA, LTA, or home loan deductions under Section 80C, are only available if the return is filed before the due date.
In conclusion, while filing a belated return comes with its challenges, prompt action can help mitigate penalties and complications. It's advisable to seek professional advice if you're unsure about the process or have specific questions.
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