The Income Tax Department has made income tax efiling simpler as tax-paying individuals can make use of the Sahaj (ITR-1) form to file their returns. However, many people end up waiting until the eleventh hour to file their taxes online, and this can stress them out. Check out why filing returns on time is beneficial:
1. Say Goodbye to Fines and Penalties
You will end up paying one per cent penalty for each month you delay filing the returns. Also, if your returns are more than INR 3,000/- you risk criminal prosecution by the Income Tax Department. On the other hand, if you do on-time income tax efiling, you can avoid being levied interest due to non-payment or late payment and avert the risk of criminal proceedings.
2. Enjoy Interest on Refunds
The IT Department is obligated to pay you an annual interest rate of 6% on the extra tax that you have paid to the government provided the amount is more than 10% of the amount paid as tax. Usually, this benefit is reserved for individuals who end up paying too much taxes due to TDS or as advance tax.
The interest rate is calculated from 1 April of the assessment year until the refund is made. However, if you file your taxes late, the calculation for the interest will begin from the day you file your returns until the refund is processed by the IT Department. Imagine the interest you will lose if you have to get a hefty return on your taxes?
3. Ample Time to Revise the Returns
Though it has become simpler to file income tax returns, it does not insulate you against mistakes. You can forget to take advantage of certain tax benefits or not mention other sources of income. By filing your ITR before the last day, it is possible to file revised returns at any time before the current financial year ends.
Remember, mistakes in income tax filing can prove to be expensive as the IT Department can levy fines or you can miss out on tax refunds.
4. Carry Forward Financial Losses
Businesses that suffer from losses actually enjoy the benefit of carrying forward these losses to the next financial year if they opt for on-time income tax efiling. This means they can avail tax benefits the following year. But your business will not be able to avail these benefits if you do not file your business returns on time.
5. Enjoy Tax Savings
If you decide to file your taxes the last moment, you will be rushing through things. As a result, you can miss out on tax saving benefits. So, begin your income tax efiling process well in advance so that you can get all the necessary documents, such as loan repayment statements, Form 26AS, TDS certificates and interest certificates. As a result, you will not miss out on any tax saving benefits that you are entitled to.
6. No Scope for Technical Glitches
When you file at the last moment, you will be among the thousands who are trying to access the IT website before the last day. This overload of visitors and requests can cause the website to crash or lead to technical glitches, preventing you from filing your income tax returns within the specified period. These technical issues can lead to missing the IT returns filing deadline and thereby attracting fines and penalties.
Be a responsible citizen and pay your taxes on time. You can keep stress at bay and also enjoy these benefits by filing your ITR promptly without any delay.