InvestorQ : Why is it important to file income tax returns on time?
sarah Leo made post

Why is it important to file income tax returns on time?

Rashi Mehra answered.
4 weeks ago

Here are some key reasons to know about filing Income Tax returns on time i.e. by end of July each year.

· Filing early helps you avoid the rush hour, which is common in the last 3-4 days which creates unnecessary pressure on the IT server and often times out your returns.

· Nowadays the department is quite strict about timelines. If you miss the deadline even by a day, you are liable for steep penalties. In addition it will be a slur on your record.

· More importantly, if you have losses to carry forward, these losses will not be available if you don’t file returns on time and before the due date for filing returns.

· In case you have paid TCS and TDS that is not actually due and need to get refund, timely filing of IT returns will help your cause. That is the only way to claim your refunds.

· If you file your returns on time, the processing of your IT refunds is quicker and the disbursal is on time. This would ensure that your cash flows are churned fast.

· An oft ignored fact is that the IT returns are an important document to apply for a global visa or to seek a home loan from a bank or any other kind of funding facility.

· It is not sufficient to file your returns on time, but follow up with Income Tax website to for any queries raised by the department or details sought and address them on priority.

One small word of note about returns. One important document that you must check before filing returns is the Annual Information Statement (AIS), which is a meticulous record of all your incomes and investments mapped by transaction PAN. It is advisable to verify details like capital gains and income flows against AIS. The Income Tax department does not approve returns in the event of wide differences with the AIS. The bottomline is to get your paper work in place and file returns on time.