Rajiv Saxena has not filed his income tax return this year, even though the due date for filing the returns has passed. His deadline was October 31, 2007, but due to delay in the preparation of accounts, he was unable to complete the process.

Last week, the Central Board of Direct Taxes extended the date of filing of return to February 29, 2008. Saxena was extremely happy with the news as it gave him ample time to complete the paperwork.

However, there is some bad news for Saxena. This is because the extension is not applicable to people like him. That is, he is already late as far as the filing of his returns go.

So, who is this move meant for? This is valid for only assesses who satisfy a couple of conditions. To understand this better, we need to go back a little in time and follow the sequence of events that occurred in the last few months.

The ball was set rolling when the Central Board of Direct Taxes introduced new forms for income tax returns that would have to be filled from this year. With this introduction, all the older or earlier forms have been rendered useless. Also, the tax authorities have said that for the financial year 2006-07, everyone has to file the returns using the new forms.

This led to a lot of opposition as several taxpayers found the new forms difficult to fill. Many even approached the courts. This led to a lot of confusion as few high court verdicts directed the tax authorities to accept returns filed in the old forms as well. So, many assesses filed their tax returns using the old forms.

Then the high court decisions were challenged in the Supreme Court where it was ruled that old forms are invalid.

As a result, the CBDT has given this extension to people who filed the return on or after May 14, 2007 and that too, through the old forms. If these conditions are applicable to you, only then the February 29 deadline is applicable.

Further, the earlier filed returns would be considered invalid for all practical purposes.

This implies that the income tax assesses, who have filed their returns in the old format, need to file it in the new forms before the deadline to avoid any penalties. For all those who have been slow in filing their tax returns this year or have not been able to complete the process, this extension has no impact at all.

It is time for them to rush and complete the process as the clock is ticking in terms of interest and other payments that they might be liable for.

The writer is a certified financial planner.