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Benefits Of Filing Income Taxes Early

IndianMoney.com Research Team | Updated On Friday, July 13,2018, 11:25 AM

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Benefits Of Filing Income Taxes Early

 

 

 

The last date to file ITR is July 31st. You have less than a month to file taxes and avoid penalties. If you miss the deadline and file ITR between August 1st 2018 and December 31st 2018, you will have to pay a penalty of Rs 5,000.

What if you miss even this deadline? Well, if you file ITR between January 1st 2019 and March 31st 2019, you will have to pay a penalty of Rs 10,000. If your total income doesn’t exceed Rs 5 Lakhs, then the fee/penalty must not exceed Rs 1,000.

But, let’s not talk about taxes. Let’s talk about the benefits of filing income tax returns (ITR) early. Want to know more on Tax Planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.

 

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Benefits Of Filing Income Taxes Early

 

Yes, it’s your duty to file income tax returns in time. But, can there be any benefits of doing so? Yes, there are and let’s take a look at some of them.

 

1. Hassles of late filing Income Tax Returns

 

Filing ITR is really easy. But, only if you’re careful and take the time to do smart tax planning. You need to understand simple things on tax like Form 16 and Form 26AS, and this is where good tax planning helps you.

Make sure you file ITR in time, and avoid all the hassles that come with late filing of income tax returns.

 

2. Filing ITR helps carry forward losses

 

Let’s say you (individual/firm) have suffered a loss. If you have suffered a loss in the Financial Year in which you file ITR under the head “Profits and gains of business and profession” these speculative and non-speculative losses and also capital losses under the head “Income from capital gains” can be carried forward.

But, you get this benefit, only if you file ITR, before the due date. So file ITR in time, and carry forward losses.

 

3. Faster filing means faster e-verification

 

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The income tax department has introduced many modifications and there’s an important one you need to know. The earlier you file ITR, faster is the e-verification.

File ITR and enjoy faster e-verification. Income Tax Refund happens on First Come, First Serve basis. Filing ITR early helps you get faster refunds.

 

4. Make sure you don’t pay interest

 

Make sure you file ITR in time. Otherwise, you will have to pay interest at the rate of 1% for each month (This is simple interest) on the tax amount outstanding under Section 234A.

 

5. Avoid the defective return notice

 

If you rush filing ITR, chances are you could make mistakes, costly mistakes. The taxman could issue a defective tax return notice under Section 139(9) of the Income Tax Act.

If there’s a mistake when filing ITR, the tax officer would ask for proof of any mistake/mismatch. The onus is on you to prove there’s a mistake.

What happens if you don’t bother to respond to the income tax notice? Well, there are heavy penalties.

 

SEE ALSO: What Is Dividend Yield? How To Calculate Dividend Yield?

 

6. File taxes and get a loan

 

Banks and NBFCs ask you to file ITR, so that they can process home loans, education loans, personal loans and so on, really quickly. Banks could ask for proof of ITR, before sanctioning your credit card.

File ITR on time and avail loans.What if you miss even this deadline? Well, if you file ITR between January 1st 2019 and March 31st 2019, you will have to pay a penalty of Rs 10,000. If your total income doesn’t exceed Rs 5 Lakhs, then the fee/penalty must not exceed Rs 1,000.

 

7. File ITR and register your property

 

Some States in India require you to file Income Tax Returns (ITR) for the last 3 years, so that you can register your immovable property.

 

8. Escape from the last-minute surge

 

You must have tried to grab an Ola or an Uber ride in rush hour. This is the peak time and there’s something called surge pricing. This is the time cabs hike fares.

In much the same way, if all citizens rush to file Income Taxes on the last day, there could be a temporary break-down of the Income Tax Filing Website. You might not be able to file ITR in time.

Hurry up. File ITR and enjoy a peaceful time.

 

Be Wise, Get Rich.

 

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IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

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