31st of July every year is the last date for e-filing your return without penalty. However, you can e-file your return with some penalties till 31st March of the following year. While there are options to file the income tax returns after the stipulated date, there are several concessions that an individual assessee will get.
Taking the first deadline of July 31 has its benefits. Tax experts, therefore, say one should start filing returns on time to avoid hassles later.
Here are five benefits of filing your taxes by this date:
You can revise
Committing mistakes while submitting returns are very common. An incorrect mobile number or forgetting to claim a deduction are standard errors. Sometimes an income may not have been included, or income not needed may be added. By filing returns by the due date, you can revise it again and again. In case of belated filing, the taxpayer loses this advantage.
Get refund faster
If you file returns earlier, you will get the refund fast. Income tax department has been processing refunds faster for returns filed on time. Delays in filing also mean delay in receiving the refund. If excess TDS has been deducted from your income, do not delay your filing.
Paying tax dues timely
A lot of taxpayers see a tax due in their return after they consolidate their incomes and prepare their submission. This may happen due to the inclusion of interest income. If there is a tax due, interest keeps accumulating until it is paid. So filing on time makes sure taxes are paid in time, and interest (under sections 234B and 234C) does not keep adding up. Why shell out extra money when you can file on time and save on penal interest?
For those filing belated returns, they will also need to shell out a penalty. If there is tax due, interest under 234B and 234C is levied. By filing your tax returns on time, you can avoid paying interest under section 234A. This interest will be charged at 1% per month. It is calculated from the due date till the date on which you file your return.
Carry forward your losses
The taxpayer cannot carry forward certain losses after July 31. The Income Tax Act allows individuals to carry forward losses under the capital gains head and also business losses for professionals and businesspersons. This can be availed if only if your return is filed within the due date. Losses from business and profession are also allowed to be carried forward when the return is filed on time.