By India Today Business Desk: The deadline for filing Income Tax Returns (ITR) for the Financial Year 2022-23 is fast approaching, set for July 31, 2023.
However, waiting until the last minute is not ideal for taxpayers.
Filing ITR early offers numerous benefits, including reducing chances of mistakes, avoiding penalties for late filing, and ensuring faster tax refunds.
Additionally, filing early provides taxpayers with more time to correct errors and handle any scrutiny or notices from the Income Tax Department.
In this article, we will explore the reasons why filing ITR before the deadline is advantageous and how it can lead to a smoother and hassle-free tax filing experience.
Reduce chances of mistakes
Filing your ITR early provides ample time to gather all necessary documents and information, ensuring accuracy in your tax return.
These documents include Aadhaar and PAN, Form 16, salary slips, interest certificates from banks or post offices, tax-saving investment proofs, health insurance premium receipts, and proofs of capital gains.
Having these documents ready and organized will make the process smoother and less stressful.
Avoid penalties for late filing
If the ITR is filed after the due date of July 31, 2023, and on or before December 31, 2023, a late filing fee will be levied.
The penalty can be up to Rs 5,000 for people having an annual income of more than Rs 5 lakh and can go up to Rs 10,000 if the ITR is filed post the deadline.
If your income does not exceed the taxable amount limit, you will not be charged any penalty even if you file your ITR after the deadline.
Moreover, if you miss the deadline and owe income taxes, you may face a late filing penalty of 5 per cent of the unpaid taxes. However, there’s no penalty for filing after the deadline if a refund is due.
Therefore, by filing ITR on time, taxpayers can steer clear of these additional financial burdens.
Faster tax refunds
Filing ITR promptly ensures faster processing of tax refunds, if eligible. Taxpayers may receive any due refunds sooner, providing much-needed financial relief.
Avoid scrutiny and notices
Late ITR filing increases the likelihood of scrutiny and notices from the Income Tax Department, leading to unnecessary hassles and queries.
More time to correct errors
Filing your tax return is just half of the process – you need to verify it as well. As per the present tax laws, you must verify your ITR within 30 days of filing it.
Filing your ITR early gives you enough time to verify your return and correct any errors if found.