New Delhi: Income tax return filing deadline August 31 is just 10 days away. People with annual income of more than Rs 5 lakh have to file their ITR by August 31. It may be noted that filing ITR before the deadline will help taxpayers avoid notice from the Income Tax department. Although, taxpayers can file their after August 31 as well but, they will have to pay a penalty for late filing.
Worth mentioning here is that Central Board of Direct Taxes (CBDT), already pushed the deadline from July 31 to August 31 for the convenience of taxpayers. Taxpayers should file their ITR and verify it before the due date.
Here are six reasons why you should file your ITR before August 31
1. Penalty: Filing your ITR after August 31, might lead you to pay a penalty of Rs 1,000 if your income is less than Rs 5 lakh and for those having an annual income of more than Rs 5 lakh, a penalty of Rs 5,000 will have to be paid if the ITR is filed before December 31. And, if the return is filed after December 31, the fee will be Rs 10,000.
2. Interest on due income tax: Imposing penalty on late filing of ITR is generally done on a case to case basis and it depends on the income tax officer. But in most of the cases, the taxpayer is required to pay an interest of 1 per cent per month on their due income tax.
3. Faster refund processing: Income tax returns are processed on a first-come-first-serve-basis. As soon as you complete the ITR filing process, the income tax department will verify your tax liability for the financial year and if there is any refund due, then it will be processed. However, if you file your ITR after the deadline, then processing of refunds will also be delayed.
4. Interest on refund: Filing of ITR before the deadline entitles you for interest in the tax refund. As per Section 244A of Income Tax Act, taxpayers are entitled to an interest of 0.5 per cent for every month from the first day of April of the assessment year to the date on which the refund is granted. Interest will be payable if the refund arises on account of tax deduction at source (TDS) or advance-tax payment.
5. Time for ITR revision: The sooner you file your ITR more time you will have to revise it and correct the errors if any. According to revised income tax rules, a taxpayer can revise his return before March 31, 2019. Earlier, a 2-year window was given to submit a revised return but now that has been reduced to just one year.
6. Loss carry forward: Income tax laws in India allow taxpayers to carry forward their business loss, unabsorbed loss under house property and capital loss for up to 8 years so that they can set that off against their income/capital gains in the future years. However, if they file their ITR after the due date, they won’t be eligible to carry forward business/capital loss.