Filing Income Tax returns on time brings with it many advantages. Let us have a look at the many advantages on time tax returns filing offers to Assessees in a detailed manner.
Having enough time to make necessary revisions
When you file your Income Tax returns on time as stipulated by the Income Tax Department you get enough time to make revisions. Even Tax Assessees who file their Income Tax Returns year over year miss out on some aspects by oversight or for various other reasons. Filing Income Tax on time gives enough time to make course corrections and modifications to the earlier files returns.
Provides immunity from paying Fines and Penalties
Filing Income Tax Returns on time provides immunity to the Income Tax Assessees from paying Fines and Penalties that delayed filing causes. Delayed filing does not only makes people pay fines and penalties but also makes people face legal action initiated by the Income Tax Department. For instance, filing the returns for a previous fiscal year after one year’s time from the stipulated date attracts 1% penalty on the amount due to be paid. If the amount due to be paid towards Income Tax is above Rs. 3000/-, then the Income Tax Department resorts to initiating criminal proceedings against the defaulting Assessee. Filing Income Tax Returns on time safeguards the Assessee from having such unpleasant experiences
Safeguards from stress caused due to delay
Filing Income Tax is no more a cumbersome process as it was considered during the earlier days. Online Tax Filing systems has eased Tax payers’ life to a great extent. However, Income Tax filing involves submission of many kinds of documents as proof of investment. When Income Tax is filed in the last minute, we experience high levels of stress which may lead to missing out submission of papers. This further complicates the already delayed filing increasing the chances of payment of excess tax. This will in turn lead to refund process, follow up and other related activities.
Carrying forward different types of losses incurred
It is not necessary that ever year needs to be profitable on all aspects. Some years may make us experience loss in different aspects like income from investment sources, capital gains and business. When an Income Tax Assessee files his tax return on time, he can make use of the losses he incurs in the current fiscal year to claim tax relieve in the subsequent one. Even if an Assessee has paid all taxes on time, if he files the Income Tax return late carrying forward the losses is disallowed. This acts as a major loss to the Income Tax Assessee adding to all the other losses he experiences in various other financial aspects. One big relief that acts as an exception to the carrying forward aspect of losses is the same accrued due to property. Tax relief on losses incurred due to properties is an exception to all the above rules applicable for other types of losses accrued through different sources.
Avoid losing the Interest component on Tax Refunds
One of the biggest advantages that Income Tax Assessees have in filing their tax returns on time is to get interest on the refund amount pending with the Income Tax Department. If the refundable amount is 10% higher than the actual tax amount payable by the tax Assessee, the Income Tax Department is supposed to pay an interest of 6% for the same. Filing Income Tax Returns well within the due date enables interest calculation right from the 1st day of April during the Assessment year. Interest is calculated till the date when the refund is actually processed. When you file Income Tax Returns in a delayed manner and there is a refund amount involved, the interest calculation starts from the date of returns filing till the date the actual credit is given to the Assessee.
Helps speed up the Bank loan process
Whenever individuals approach banks for availing different kinds of loans, Banks will ask for proof of income of the buyer. One of the significant proofs that Banks accept without rejecting the same it the Income Tax Filing return – ITR. When the person who wants to avail loan submits IT returns for the previous years, loan sanctioning happens immediately.
For obtaining Visa to travel abroad
When Income tax return is filed well in advance and the process completed end to end, it comes in handy for visa processing. Income Tax Return filed acts as a proof of their affordability to travel and manage abroad.
For winning Government vendors
The value of Businesses houses, corporate, Organizations of varying sizes and contractors is highly dependent on their healthy Income Tax Returns for the year and the previous ones. Particularly when you want to bid in a tender and win the same, Tax filing helps a lot to win more of them.
Other aspects that benefit out of ITR Filing on time
Filing Income Tax on time in the perfect manner is useful in many other ways too. A legal professional or Chartered Accountant who wants to continue in their profession with a new business unit will be checked for his financial credibility through the ITR Form. The importance of these forms can be clearly understood at the time of judicial interview where in the last 7 years’ ITR records are scrutinized before appointment. Filing Income Tax on time will come in handy for all those Entrepreneurs who are in need for funding requirements for their new business start ups.