Why Should You File Income Tax Returns On Time? 5 Important Reasons

The last date for filing Income Tax Returns (ITR) is around the corner. Taxpayers must submit their ITR for FY 2021-22 online before the end of the deadline to avoid any fine or penalty. 

The last date for ITR filing of individuals and salaried employees whose accounts are not required to be audited is July 31. 

For taxpayers whose accounts need to be audited, the deadline is October 31. We always stress the importance of filing your I-T returns before the deadline, but do you know the benefits of doing so. 

Here are the top benefits of filing ITR on time.

Avoid Penalty

Not filing an ITR by the due date may invite a Rs 10,000 penalty and other consequences per the Income Tax Rules. Delay in ITR filing can also lead to interest on the tax payable under Section 234A of the Income Tax Act 1961.

Legal Action 

In case of delay or default, the Income Tax department may send a notice and add to your legal troubles. If the I-T department remains unsatisfied with the response to the notice and finds fair ground, a legal case may also follow.

Easy Loan Approval

Having a clean track record in Income Tax Returns filing makes getting loans approved from lenders easier. In case of a loan application, banks require the borrowers to provide a copy of the ITR statement as proof of their income. 

Income Tax Returns are a mandatory document for any formal loan approval. Individuals who don't file tax returns may struggle to get loans approved from institutional lenders.

Carry Forward Losses

The Income Tax rules allow forwarding the losses to the next financial year in case of ITR filing before the due date. This allows taxpayers to reduce their tax liability of future incomes.

Quicker Visa 

Most embassies require individuals to submit their ITR history while applying for visas. Having a cleaner track record of tax filing facilitates smoother processing of the visa application.