Why it is important to file ITR on time?

Why it is important to file ITR on time?

The income tax department has made the process of filing of Income tax return extremely convenient for taxpayers by introducing the online facility. This e-filing facility is speedy and accurate, and provides convenience not just for local residents in India but non-resident Indians (NRIs) as well.Tax consultant Dubai and authorised intermediaries offer services for electronically filing I-T returns on behalf of taxpayers, under the Electronic Furnishing of Return of Income Scheme, 2007. A registered e-return intermediary, Alankit Limited has over 13 years of industry presence in the UAE and offers professional ITR filing services.

When should taxpayers file their returns?

The last date of filing of income tax return (ITR) for a financial year, say, 1st Apr 2018 to 31st March 2019, is 31st July 2019, unless extended by the I-T department. Taxpayers can e-file their tax returns any time before the specified date.

Avoid penalty

If taxpayers do not submit their income tax return (ITR) on or before the deadline, they are liable to pay a penalty of up to Rs 10,000 for late payment. If they file their returns after 31st July and on or before 31st December, they are required to pay Rs 5,000 as a penalty. Also, in case taxpayers file their returns after 31st December, the penalty levied on them will be Rs 10,000 which is applicable for those who have taxable income of over Rs 5 lakh. If the taxable income of taxpayers is up to Rs 5 lakh and they have delayed their ITR process, they must pay a penalty of Rs 1,000.

Avoid one percent monthly interest

Besides the penalty stated above, taxpayers must file income tax return (ITR) in order to avoid additional interest charges. By not making timely payments and having tax dues, taxpayers need to pay 1 percent penal interest on the tax amount which is due. This is in addition to a higher penalty of Rs 5,000 or Rs 10,000, whichever is applicable.

Avoid last minute hassles or stress

Although the online facility makes things a lot easier for professionals, yet, the task of e-filing should not be done at the last minute. This is because the chances of errors or missing out on one or more tax savings which were due to you could become higher. Moreover, a taxpayer gets enough time to arrange relevant documents viz. TDS certificates, loan repayment statements, interest certificates, Form 26AS, etc. Also, one should try to e-file early in order to avoid heavy website traffic.

Avoid mistakes

work to support taxpayers who usually tend to make mistakes in terms of overlooking income, extra tax paid or missing important tax benefits. Revising the returns after the due date is not possible. Such mistakes can often result in fines imposed by the IT Department or loss of tax refunds. Thus, taxpayers must ensure they file their well in advance so that they have sufficient time to file the revised returns any time before the end of the current financial year. This means, if a taxpayer has filed his or her returns by 31st July 2019, he or she can file the revised returns any time before 31st March 2020.

Avoid interest loss on refunds

When taxpayers file within the due date, the interest accrued on refund would be calculated from 1st April of the Assessment Year to the date at actually processing of refund amount is done. But, in times of late filing by taxpayers, the interest would be computed from the actual date of filing up to the date at which refund was processed. This would result in interest loss of about four months from April to July leading to substantial loss in case of large tax refund due to a taxpayer.

In order to ensure financial discipline, it is highly recommended to file income tax return well before of the specified due date.