Filing of income tax returns (ITR) is around the corner and authorities have already released the necessary utility for such filing.
The due date for filing ITR for individuals is July 31 of the following year. Thus for the tax year 2018-19, the due date is July 31, 2019.
There is also a provision available to file returns after the due date. The returns so filed are treated as belated. Further, an individual is also given a window to revise the tax return in case any error or omission is noticed after the original return has been filed.
The due date of filing a revised or belated tax return say for the tax year 2018-19, is March 31, 2020.
Further, where the total income of an individual is less than the maximum exemption limit, but tax has been deducted at source (TDS), a return will need to be filed to claim the refund.
This situation is commonly seen in case of senior citizens and non-resident Indians. Comprehensive and timely review of Form 26AS (annual statement of income and tax deducted thereon) will ensure identification of such situations to avoid loss of tax refund.
Timely filing of tax return is important to avoid interest and late fee implications. Where an individual files tax return after the due date, interest is levied at the rate of 1 percent, per month, for each month of delay following the due date of return filing on any remaining tax payable.
In addition, an individual has to mandatorily pay a late filing fee of Rs 5,000, in cases where the return is filed on or before December 31, and Rs 10,000, if the return is filed post-December 31.
However, the late filing fee cannot exceed Rs 1,000 where the total income of an individual does not exceed Rs 5 lakhs.
In case an individual is a director in a company, details such as name and Permanent Account Number (PAN) of the company, whether its shares are listed or not and Director Identification Number (DIN) are required to be reported in the tax return form.
With the advancement of technology and high-end processing systems, it has become easy for the tax department to track transactions carried out by an individual through various sources.
Thus, it becomes all the more important to correctly report the income and make appropriate disclosures to avoid notices or scrutiny at a later date.
Keeping the above views in mind, it is prudent that ITR is filed before the due date to ensure that all taxes are paid well in time and to avoid last minute stress and hassles. Furthermore, it will help in better planning of taxes and will facilitate informed decisions.