10 Benefits Of Filing Your I-T Return On-Time   Jun 27, 2018


Your I-T Return On-Time

Many procrastinate over filing their I-T returns. You know it is not a good idea to delay your tax filing, but still end up doing it at the end moment.

But as rightly said by Benjamin Franklin, “In this world, nothing is certain but death and taxes”.

Of course, filing taxes might not be the most exciting exercise, but you cannot ignore it.

Here are top 10 benefits of filing income tax return on time: 

  1. Faster Processing Of Returns

    Filing your returns closer to the due date may lead to a delay in processing. When e-filing your returns, the servers may slow down due to numerous requests closer to the tax return deadline. Avoid the rush and possible delays by filing your tax returns early.

  2. Quicker Refunds

    If you file your claim in advance, then your tax refunds may get processed faster. Refund processing usually takes more time than processing forms with a tax due. If you file later, it may get delayed due to the rush. Plus, don't ignore the opportunity cost.

    If your tax refund is a sizable amount, you can put it to productive use early and reap earnings. The longer you delay, means missing out on higher interest that could be earned on the amount.

    Moreover, if your refund amount is greater than 10% of the tax payable, you are paid an interest @6% p.a. calculated from the date of filing the return. You lose this benefit, if you file the returns after due date.

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(source:Freeimages)
 
  1. Enough Time To Get All Your Documents In Order

    Though the tax filing process has been simplified, don’t underestimate the time required to file your returns. Once you start the process, you may realise that additional documentation is required. Documents such as interest certificates, loan repayment statements, TDS certificates, Form 26AS etc., need to be in order.

    By starting your income tax preparation early, you will have enough time to request for these documents from the bank or from the appropriate sources.

  2. Time To Eliminate Errors

    If you file your returns early, you will get enough time to root out errors. In a haste to meet the deadline, you may forget to include certain sources of income or miss claiming a deduction.

    You can file a revised return before the end of the next assessment year, which is March 31, 2020 for AY2018-19.

    Please note, the deadline for filing revised returns has been reduced. From this year, i.e. AY2018-19, the deadline for filing revised returns is March 31, 2019. Start early to avoid unnecessary errors and delays in processing.

  3. Avoid Late Payment And Penal Interest

    A belated return (tax returns filed after the due date) attracts a penalty and interest. Under Section 234F of the Income Tax Act, there will be two set of penalties; first, a Rs 5,000 penalty for belated returns filed on or before December 31 for that assessment year, and second, Rs 10,000 for any other case.

    For small taxpayers whose total income does not exceed Rs 5 lakh, the penalty amount is reduced to Rs 1,000. Apart from this, under Section 234A, interest would be levied @1% per month, calculated from the due date.

  4. Eliminate The Need Of Professional Services

    For salaried employees, e-filing of returns can be a breeze. If you are salaried, once you have your Form 16, you can file your returns without much hassle. Salaried individuals with income up to Rs 50 lakh and owning one house or property can use the one-page ITR Form-1 (Sahaj). This simplified form is convenient and easy to understand.

    Hence, starting early will give you the time to understand the tax filing process on your own and avoid the need of expensive professional services. But, if you have multiple sources of income or if you have any doubt when filing your returns, it will be wise to take help of a qualified tax return preparer or a chartered accountant.

  5. Your Tax Return Preparer Will Pay More Attention To Details

    If you find preparing your taxes confusing and time consuming, seek the assistance of a certified tax return preparer (TRP). You can locate a TRP in your area here. Don’t delay. Avail of the services of a TRP early on.

    Nearer to the due date, chartered accountants and TRPs will be flooded with work, hence, they may not give sufficient time to resolve any query. By submitting your documents earlier, you will give them enough time to examine your documents and eradicate errors and/or be able to save you more tax.

    You may also save on fees and can negotiate a better rate if you avail of their services early on. The moment they get flooded with clients, they may not even entertain you.

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  1. Faster Processing Of Loans, Visas and Credit Cards

    Your income tax return acts as proof of the income you earn. It becomes a mandatory document for processing of loans, visas/master and credit cards.

    Therefore, if you are applying for a home loan, it is pertinent to have all your income proofs ready. In addition, paying your tax on time adds to your credentials as a trustworthy and law-abiding citizen.

  2. Inputs on how to plan your taxes for the current financial year

    We all learn from our mistakes. You may have missed availing certain deductions last year. When you file returns early, you may get inputs on how to save tax in the current financial year.

    Every year the tax rules are marginally reformed. Thus, filing returns early, may give ideas on how to save on tax for the current financial year. You will be able to better optimise the tax deductions you are eligible for. Additionally, you can inform your employer if you wish to alter and optimise your salary structure to save more tax.

  3. Eliminate stress

    Filing your taxes itself can be stressful. You can avoid the additional financial stress of missing the due date or being charged a late fee and penal interest. Stress has been known to adversely affect our health. By submitting your tax returns before the deadline, you will be happier with a host of benefits.

 To Conclude

It is said that, the more you resist, (something in life) the more it persists. Hence, do not wait for till the end.

PersonalFN is of the view that you must always file your tax returns on time to ensure your taxes are paid before the due date. This will not only provide you the benefits covered in this article, it will defer additional costs in the form of penalties that can arise later.

This will in turn help you  plan your taxes and investments better and eventually, empower you to make smarter decisions.

Author: Rajani Vyas



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