The deadline for filing of tax return for AY 2015-16 is August 31, 2015. But what if you do not file your income tax return (ITR) by due date? Can I-T department penalize you?

The good news is there is no penalty if you miss the August 31 deadline but file your ITR by March 31, 2016. But you loose on some benefits (discussed later).
In case you miss that deadline too, you still can file your return till March 31, 2017 but in this case the I-T department can ask for penalty of Rs 5,000 after giving you chance to explain your reason for not filing. Though the late filing penalty is rare in case you have no tax dues but still it depends on your accessing officer.

 What if you don’t file AY 2015-16 return even by March 31, 2017?

In case you miss the March 31, 2017 deadline then you would not be able to file your returns without I-T Department intervention. Also, the tax officer has to do your tax assessment based on best information he has resulting in increased tax liability.

Impact of late filing of tax return:

Here is a list of benefits you miss on in case you skip the August 31 deadline:
1.                  1% Monthly Late payment fee on tax due: In case after adding up all the TDS and advance taxes, if there is any tax payable from your side, you will need to pay monthly 1% late fee on the amount due for each month of delay.
2.                  Late refund: if you file your ITR late, you will also get your excess tax paid refunded late. This is a loss as you could have put to the money to better use and you obviously loose on the interest part.
3.                  Cannot revise your ITR: You cannot file a revised return in case you filed your original ITR late. This can be a major drawback if you find some error on a later date or just forgot to take advantage of some tax exemption.
4.                  Cannot carry forward your losses: you cannot carry forward following losses in case of delayed filing:
1.       Speculation loss,
2.       business loss excluding loss due to un-absorbed depreciation and capital exp on scientific research,
3.       short term capital loss,
4.       long term capital loss,
5.       loss due to owning and maintenance of horse races
However you can still carry forward loss from House property. The above list is not comprehensive and may impact you the wrong way in case of late filing of tax returns.
So if you have not filed your return yet do it before August 31, 2015 deadline.