ITR Filing Deadline: Why Waiting for an Extension Could Cost You:

Every July, many taxpayers postpone filing their Income Tax Return (ITR) in the hope that the government will extend the deadline beyond July 31. But depending on an extension can result in penalties, late refunds and needless last-minute stress.

However, in the past, a deadline extension has been announced only in exceptional circumstances such as major technical glitches in the income tax e-filing portal or administrative issues. Tax experts and professionals say taxpayers should not expect the deadline to be pushed back. Waiting until the last minute can result in missed compliance requirements and additional penalties.

One of the biggest advantages to filing early is that taxpayers will have time to spot and fix mismatches in their financial information. Many people discover problems in their Form 26AS or Annual Information Statement (AIS) only when they begin filing their return. If this happens just before the deadline, there may not be enough time to contact a bank, employer, or financial institution and get the issue corrected.

For example, if a fixed deposit has earned Rs 45,000 as interest during the year, the interest income and the tax deducted at source (TDS) should be correctly reflected in the taxpayer’s records. The taxpayer may have to contact the bank to correct any missing or incorrect information. The same checking is important for salary TDS, mutual fund dividends and capital gains. Taxpayers can miss out on eligible tax credits or have their refunds delayed if they do not timely review the AIS and Form 26AS.

Filing early also allows taxpayers time to rethink their choice of tax regime. The beginning of the financial year sees salaried employees selecting a tax regime based on their expected income and deductions. However, their financial situation may change during the year. For example, they may take a home loan or buy a health insurance policy, which could affect which tax regime is more beneficial.

Experts and tax professionals say taxpayers should compute their final income, deductions and investments under both old and new tax regimes before filing the return. For instance, a person with an income of Rs 15 lakh per annum may be better off with the new tax regime. But if the same person is claiming deductions like Rs 2 lakh on home loan interest, Rs 1.5 lakh under section 80C and Rs 25,000 under section 80D then the old tax regime may be better.

So taxpayers should not bank on a possible deadline extension. Checking financial information early, correcting mismatches and comparing both tax regimes can help smoothen and make the ITR filing process accurate. Filing before the deadline can also help taxpayers avoid penalties, reduce last-minute stress, and receive refunds without unnecessary delays.