Important Points need to know about why should you file Income Tax Return
DESPITE THE RELAXATION WHY SHOULD YOU FILE YOUR INCOME TAX RETURN IN TIME?
The expected date for filing ITR or Income Tax Return for people is approaching fast, however, many individuals think that if he/she has paid all his/her taxes then there is no unfavorable result even if he/she misses the deadline of Tax Return filing.This is because the suggested fine for delayed filing of the income tax return comes into action from the coming year and let you know it is not at all applicable for returns that are filed for FY16-17.
But Individual needs to learn that even if all one’s taxes have been endowed and there is no fine for delayed filing, one will lose out several advantages of one doesn’t file his/her income tax return within the deadline.
REASONS FOR WHICH YOU SHOULD FILE YOUR INCOME TAX RETURNS WITHIN THE DEADLINE:
The actual fact is that the tax department is always tracking people’s financial details. And this is the reason why many taxpayers receive SMS or letter from the tax department whenever they fail to file their returns within the deadline.
Besides from getting a warning from the tax department, one would even lose some advantages if one doesn’t file his/her income tax by the due date.
- REDUCTION IN INTEREST ON RETURN:
If you ever claim a reimbursement in the return then you will drop some of the interests paid by none other than the tax department. But, in a case of the delayed return, the interest is being calculated from the actual return filing date till the day when the reimbursement is permitted. If you file your return only one day after the deadline you will be losing interests for at least long four months.
- BELATED RETURN WHERE TAX STAYS UNPAID:
If you are having any liability for unpaid tax, then filing the return after the actual date will result in imposing of disciplinary interest @ 1% every month from the deadline for filing your return till the date of filing. Needless to say, it will be an avoidable and heavy pay out. In addition to this, tax authorities can even initiate legal action if the return is being delayed.
- LOSSES ARE NOT CARRIED FORWARD:
If you file a delayed return then you can be able to carry forward all your losses. Income from trades, capital gains, speculation business and profit from other sources can never be carried forward if the taxpayer files a belated return.
- THE PENALTY CAN BE LEVIED:
If any person doesn’t file his/her return by 31st March and is not able to give a solid reason for the delay then Tax authority will impose Rs. 5000 as the penalty amount.