You pay tax if you have an income. But what if you sustain a loss or offer excess tax on your income? Income tax allows you to claim a refund of such excess tax or carry forward the losses that can be set off against your income for the next few years. Every benefit comes attached with certain terms and conditions. The only condition to claim the above benefits is to file an income tax return declaring your loss before the specified deadline.
But say you missed filing the return within the deadline due to Covid related challenges? Or due to reasons beyond your control? Will you lose the benefits of refund or carryover of losses? Is there a workaround to still claim the refund due or carry forward the losses? Yes, subject to yet another set of conditions.
Central Board of Direct Taxes (CBDT)- the authority which administers the entire Income Tax Law has many powers. Its one such power is laid down in Section 119(2)(b) to authorise any income-tax officer other than an officer of the rank ‘Commissioner(Appeals)’ to admit an application for claim of any:
- Exemption
- Deduction
- Refund or
- Any other relief as the case may be
even after the expiry of the prescribed deadlines if the taxpayer could not file the return within the deadline because of certain genuine difficulties he faced. This relief is provided to the taxpayer to ensure he doesn’t have to face genuine hardship if a refund or carry forward of losses is denied.