If you don’t file by 31 July, you forego some of your rights as a taxpayer. For instance, if you file your return by due date, you are allowed to modify it any number of times till the time of assessment. If you file it after the due date, you cannot revise it. This can be a costly error because if there is some miscalculation in your tax liability, you won’t be allowed to rectify the mistake. This is not such a big problem if you have missed out on some deduction for which you were eligible. All you stand to lose is a few thousand rupees you paid in excess tax.
What happens if you underestimate your tax liability because of a miscalculation, say, forgetting to include income from other sources. You can revise your return only if you adhere to the filing deadline. There is no penalty for voluntarily filing a revised return, but there could be a hefty one for under-reporting your income.