Why should you file Income Tax return(ITR) within the due date?

Many advantages of filing the Income Tax Return with in the due date.

Below are important ones covered in detail.

1. Avoiding Penalties and Fines

For tax payers with a Total Income of more than Rs.5,00,000
  • If ITR is filed on or before 31st December following the last date – the fine would be Rs.5,000.
  • If ITR is filed after 31st December – the fine would be Rs.10,000.

For tax payers with Total Income of less than Rs. 5,00,000 – Rs. 1,000.

2. Avoiding Interest on Income Tax

  • Interest u/s 234A: Interest calculate 1% per month.
  • Interest u/s 234B: Assesse as failed to pay such tax or the advance tax paid by such assessee is less than 90% of the assessed tax; the assessee shall be liable to pay simple interest 1% for every month or part of a month.
  • Interest u/s 234C:The advance tax paid by the assesse company on its current income on or before 15th June, 15th September, 15th December is less than 15%, 45% and 75% respectively on the returned income, then the company shall be liable to pay simple interest at the rate of 1% per month for a period of three months on theamount of the shortfall.

3. Getting a Chance to Revise Your Returns

The ITR filing process might have been simplified but still mistakes can happen in the form of overlooked income, missed tax benefits, etc. In case you have filed your ITR in a timely manner, you do get opportunities to revise your returns even after the due-date has passed.

Common mistakes, such as missed income and extra tax paid, can cost you in the long term whether through fines imposed by the IT Department or through loss of tax refunds.

4. Carry Forward Losses

In case you incur losses during earlier assessment years, thru sources of income such as business, capital gains, or income from other sources, they can be carried forwarded to the next financial year, and provide tax relief in the subsequent year. Unfortunately, such losses cannot be carry forwarded in case the ITR is filed after the due date.

5. Avoid Legal Repercussions

Filing your ITR after the due date or not filing it at all has legal implications like notices, queries, and physical attendance at the tax commissionerate.