The Income Tax Department has gone on overdrive this financial year to facilitate filing of belated and revised returns by March 31 to give those who had made large unexplained cash deposits during demonetisation 'to come clean'. March 31 is the deadline to file belated returns for financial year 2015-16 and 2016-17 and revised returns for financial year 2015-16.The income tax department's website has a huge advertisement which reminds people that 'Non filing and incorrect filing of income tax return may result in penalty and prosecution.'Interestingly, the department is simultaneously telling people that "less than 1% of returns are picked up for scrutiny or investigation. The selection of scrutiny is made by Computer Assisted Scrutiny System (CASS) without any human intervention."The department has instructed all its tax offices and Ayakar Seva Kendras (ASKs) to remain open from March 29-31 despite being holidays to facilitate taxpayers in filing their returns.The department had started this drive a month or so ago with advertisements in newspapers saying "come clean by filing belated returns/revised returns if you have made any large unexplained cash deposits in your bank during demonetisation."However, even if you have not made any unexplained cash deposits during demonetisation here's why you should still file a belated ITR The income tax department has been tracking financial transactions done by you. The department has details of all cash deposits made above a certain level with banks during demonetisation.Naveen Wadhwa, DGM, Taxmann.com, a publisher of taxation and corporate law books says, "The department is also receiving information about the high value transactions done by you. Every bank is required to file Annual Information Return (AIR) to provide high value transaction details to the department.These transactions include:a) Payment made in cash for purchases of demand drafts or pay orders or bankers' cheques of an amount aggregating to Rs 10 lakh or more in a financial year.b) Payments made in cash aggregating to Rs 10 lakh or more during the financial year for purchase of pre-paid instruments issued by the RBI.c) Cash deposits or withdrawals (including through banker's cheque) aggregating to Rs 50 lakh or more in a financial year, in or from one or more current accounts of a person.d) Cash deposits aggregating to Rs 10 lakh or more in a financial year in one or more saving accounts of a persone) Putting more than Rs 10 lakh in a fixed deposit in a financial yearf) Payment of Rs 10 lakh or more in cash against credit card bills in a financial year.Apart from banks, other institutions such as mutual funds, companies and others are also required to report such transactions under Rule 114E of the Income Tax Act.The income tax department in its advertisements have clearly mentioned that non-filing of returns or incorrect filing of income may result in penalty and prosecution.Chetan Chandak, Head - Tax Research, H&R Block India says, "It is in the interest of the taxpayers to file their belated ITR or come forward and provide correct information by revising their ITR. In the Budget 2017, time limit to file ITR has been reduced to one year from the two years earlier. Therefore, if taxpayers miss this deadline then, the tax department can send you notice and levy the penalties for non-payment of taxes. These penalties can range between 50 percent and 200 percent of the tax liability. In addition to that, interest on the late payment of the taxes will keep on increasing till the time of payment of taxes."Interest will be levied under section 234A for the late filing of returns at a rate of 1 percent per month or part thereof - this is equal to 12% a year.If a person with unaccounted income (which came to light as it had to be deposited as unexplained cash in his/her bank account) were to now include it in a previous income tax return by filing a revised return, then he/she would have to pay tax plus interest and penalty (if applicable) on this income as well.However, the total of tax, interest and penalty payable in such a case is likely to be less than if the department was to issue the concerned person a notice and then take up his/her case for scrutiny assessment or conduct a raid and proceed accordingly, adds Chandak.Taxpayers who have taxes payable and need to deposit it by visiting the bank branch should remember that banks are closed on March 29 and 30 and will re-open on March 31, which is also the last day to file belated and revised ITR.As per the income tax laws, it is mandatory for individuals having income more than basic exemption limit (depending on the age) to file ITR.For an individual below age of 60 years, income of Rs 2.5 lakh is exempted from tax. Similarly, for senior citizens, age 60 years but below 80 years, income of Rs 3 lakh is exempted from tax. Income of Rs 5 lakh is exempted from tax for super senior citizens who are above 80 years.