ITR Filing 2023-24: Best Time for Filing ITR for Salaried Individuals

The Income Tax Return (ITR) filing online process for FY 2023-24 (AY 2024-25) has now started at the e-filing income tax portal. The commonly used ITR forms were made accessible on April 1 in order to enable early and convenient tax return filing.

Although ITR forms are available, salaried individuals should wait until June 15 to file their returns. The main reason to do so is that their Annual Information Statements (AIS) and Form 26AS are often fully updated by May 31, and salaried individuals receive their TDS certificates within 15 days after this date. Some data may begin to appear in AIS and Form 26AS earlier than May 31, but in general, data for the last quarter of the preceding financial year will be updated no later than May 31.

Taxpayers who file their returns with incomplete data will face penalties if their income is underreported due to missing information. Hence, it makes sense to wait until June 15.

Salaried individuals have until July 31, 2024, to file their income tax returns for FY 2023-24 (AY 2024-25).

Salaried Employees to wait till June 15; Why?

Banks and other financial institutions are required to file an annual Statement of Financial Transactions (SFT) with the income tax department. SFTs provide the income tax department with information on numerous transactions made by taxpayers throughout the financial year.

These statements include revenue from stocks, mutual funds, dividends, interest from savings bank accounts, fixed deposits, public provident fund accounts, credit card bill payments, and more. The AIS, which is available to taxpayers, is updated when these institutions file their SFTs.

AIS keeps a complete record of an individual’s financial transactions, regardless of whether tax was deducted or not. It includes information such as total salary income, tax deducted and deposited, and interest collected from savings bank accounts, even if no tax was paid on the interest.

When it comes to tax deducted at source (TDS) on income, the tax deductor, which might be a company or a bank, has until May 31 to complete a TDS return for the fourth quarter of the financial year. Although tax is deducted and deposited on a monthly basis, TDS returns must be filed quarterly in accordance with income tax laws.

When the tax deductor files the TDS return, the tax deposited against the relevant PAN is recorded in Form 26AS, which acts as a tax passbook, displaying the total taxes deducted/collected against a PAN. Form 26AS also includes TCS deductions for foreign travel and remittances.

Filing an income tax return with incomplete data from AIS may result in an income tax notice for underreporting income.

According to income tax regulations, a deductor must provide a TDS/TCS certificate when filing a TDS/TCS return. The deadline for issuing TDS certificates is 15 days after filing the TDS return. As a result, your employer must provide you with Form 16 (TDS certificate) no later than June 15.

Furthermore, if banks, mutual funds, or companies deducted taxes during the financial year 2023-24 (which ended on March 31, 2024), they must issue Form 16A (TDS certificates) to individuals by this date. TDS returns can be filed before the deadline, and TDS certificates can be issued before June 15, but in most of the cases, certificates are usually issued by this date.

Taxpayers should ensure that the tax deducted on Form 16/Form 16A is consistent with the information on AIS and Form 26AS. Any differences may cause complications for the taxpayer.

It is necessary to remember that Form 16 (TDS certificate) improves the filing of tax returns for salaried employees.

Filing inaccurate income in your income tax return might have major implications. The assessing officer may classify this as either misreporting or underreporting of income, with penalties ranging from 50% to 200% of the tax due on the underreported amount. These penalties are assessed pursuant to Section 270A of the Income Tax Act, 1961.

Consequently, it is important to ensure that the income stated on the ITR is accurate.

Apart from this, If an individual finds that they filed their ITR using incorrect income information, they still have the option to file a revised ITR by December 31, 2024.

Nonetheless, it is usually better to file the original ITR with correct and comprehensive income details.

Who should not wait till June 15?

In cases where no TDS has been deducted from an Individual’s income, no TCS has been collected from an Individual, and he/she have complete information about his/ her total income earned from various sources during the financial year 2023-24 (AY 2024-25), he/she may file ITR without waiting until June 15.