Filing of ITR: Why It is necessary for you to file your ITR before Due Date

If you are an individual whose accounts do not need to be audited under the Income Tax Act of 1961, you must file your income tax returns (ITRs) by July 31 of the relevant assessment year. For example, for the financial year 2022-23, you must finish the ITR filing procedure by July 31, 2023. Failure to comply with this regulation may result in fines and the loss of tax benefits.

Conversely, if you file your taxes on time, you may reap the benefits of filing ITRs by the due date. Let’s take a deeper look at why you need to file your ITR on time.

Reasons to File Income Tax Return before Deadline

As previously stated, the deadline for submitting an ITR is July 31 of each assessment year. However, the government may, on occasion, extend this deadline if it deems this necessary. Keep an eye on the news to stay up to know on the latest developments in ITR

This will allow you to avoid the drawbacks of late tax return submission and enjoy the benefits of submitting ITRs, as detailed below.

1. To prevent facing Penalty for delayed filing of ITR

By reporting your ITR on time, you can avoid the penalty imposed under Section 234F of the Income Tax Act for late filing of tax returns. The penalty imposed is based on your overall income and can range up to Rs.5,000.

You do not have to pay this penalty if you file your income tax returns before the due date indicated for the relevant assessment year. Furthermore, if you have any outstanding tax debts, you will be required to pay interest at 1% of the outstanding tax amount under Section 234A. You may prevent this interest by filing your ITR on time, because you can only file your tax returns once you have paid all of your tax dues.

2. For Claiming Tax Deductions

According to the Income Tax Act, numerous investments and expenses are tax deductible. You can deduct these amounts from your total income, lowering your total taxable income and tax liabilities. To take advantage of these deductions, you must include them in your ITR and file your tax returns by the due date.

3. To get Income Tax Refunds

You will be entitled for a tax refund if the amount of income tax you have paid exceeds your entire tax due. The Income Tax Department, on the other hand, can only validate and process your tax refund if you file your income tax returns on time. This is due to the fact that your ITR contains all of the specifics of the taxes you have paid as well as your actual income tax liability.

4. To Carry Forward and Offsetting Eligible Losses

Some losses, such as capital losses or losses under the heading ‘Profits and Gains of Business or Profession’, can be carried over to subsequent assessment years. The number of assessment years for which these losses can be carried forward is specified in the Income Tax Act.

5. Filing ITR on time make other operations process easier

ITRs serve as proof of income for a variety of different operations, including opening a bank account, obtaining a loan, applying for a credit card, and even getting a travel visa. By submitting your income tax returns on time, you can have the most recent ITRs available for submission as evidence of income. As a result, all of the mentioned operations will run more smoothly and efficiently.

Briefly to conclude, Now that you are aware of the numerous advantages of filing ITRs, Now that you understand the numerous advantages of submitting ITRs, you have to find the appropriate income tax return as per your financial situation.