23-May-2023 WHY ONE SHOULD FILE HIS RETURN OF INCOME WITHIN DUE DATE?

The blooming season of Income Tax Return (ITR) filing is here, and it's time to nurture your financial compliance. Filing your ITR is not just a routine obligation; it's an opportunity to take control of your financial well-being and ensure a fruitful future.

In following situations, it is mandatory to file the income tax returns in India:

1.      Income more than the basic exemption limit i.e Rs. 2,50,000 or more.

2.      If you are a company or a firm, then irrespective of whether you have profit or loss, filing ITR for the financial year is a must. 

3.     If any TDS deducted your income or TCS collected from you and you are looking forward to claiming a tax refund for the financial year.

4.     If you are resident indian and you are beneficiary of having any financial interest or signatory to any foreign account.

5.      If you are an NRI (Non-Resident Indian) but if your total annual gross income earned or accrued in India exceeds Rs2,50,000.

6.  Even if you do not fall into any of the above criteria but are looking forward to avail any kind of loan, then you should file ITR. ITR filings are taken as valid income proofs and are often asked while opting for any kind of loan.

We at APMH strongly recommend you file your Income Tax Return for FY 2022-23 (AY 2023-24).  ITR needs to be filled by 31st July 2023 by all individuals, HUFs and non-corporate entities whose accounts do not require to be audited for the financial year 2022-23.

Taxpayers are required to file ITR within the stipulated time limit to avoid any kind of penalty. A penalty of up to Rs 5000 is imposed for late ITR filing from 1st August 2023.

If you have not filed ITR till the last date, then according to the rules, you may have to pay additional interest on the tax due @ 1% per month on delay in filing Income tax returns.

ITR is an important document for any type of loan application and approval. If one files income tax returns continuously for each year, then any government or private bank is generally ready to sanction loans easily.  

Many times, you would have some losses from your stock market investments or any of the property transactions. You can take benefit of this loss against your future income subject to certain conditions laid down. One of the important conditions is to file your returns, that too in time. 

Sections 70 and 71 of the Income Tax Act 1961 contain certain provisions for carry forward of loss of a particular year to the next year if one files his return of income within the due date. This means that you can carry forward your loss to the next assessment year. This benefit is not available if one misses the due date of filing the return of income.

Form 26AS read with the Annual Information Statement, which gets downloaded from your Income Tax portal login gives detailed information regarding every reported transaction possible. It hints towards your Investment, Income and the tax deducted if any. One should take a look at this statement, so as to avoid missing out on reporting any important incomes and also claims of your TDS. 

Nowadays, processing of income tax returns filed by assessees is expedited. This helps in getting an eligible refund from the department in time. 

In AY 2022-23, India saw a record filing of 5.83 Crore ITRs by 31st July 2022. Out of this, more than 70% ITRs got filed in the last few days as there was little hope of the due date extension. There is a lot of risk of errors in the last moment rush and sometimes the portal also faces blockages in the last moment. We therefore recommend finishing your ITR filings comfortably and well before time.