Top 5 benefits of filing Income Tax Return on time

Income Tax Return (ITR) filing due date for Assessment Year 2021-2022 is December 31st, 2021. As per the Income Tax rules, any individual having an annual income above Rs 2.5 lakh should file ITR. Income up to Rs 5 lakh is tax-free. Experts advise that even if you have no tax liability, you should file ITR on time for enjoying several benefits.

Due to technical glitches in the new tax filing portal, the government has extended the ITR due date. Following are five benefits that you can enjoy by filing ITR on time:

1. Save interest

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Not filing ITR on time may lead to interest on the tax payable. However, as per the provisions under Sections 234A and 234B, you can save interest applicable on the payable tax by filing ITR on time. There is no relief on penalty for late filing of ITR.

Taxpayers are required to pay interest for delay in ITR fling. As per the Income Tax rule, if a taxpayer has not paid advance tax or paid less than 90% of his/her liability then he/she would have to pay interest under Section 234B at the rate of 1% per month or part of the month till the date of payment of tax.

2. Avoid penalty up to Rs 10,000

There is a cost of filing delayed ITR! Filing of ITR after the due date may lead to a penalty up to Rs 10,000 as per the Income Tax rules.

3. Avoid notice from the Income Tax department

The Income Tax department may send a notice if not filing ITR before the due date. And that may become an unwanted headache for you. Hence, it is always better to file ITR on time.

4. Loan approval becomes easy

It is easier for ITR filers to get their loan requests approved by lenders. When you apply for a loan, the bank would ask you to provide a copy of your ITR statement as proof of income statement.

ITR report is a mandatory document for getting loan approval. Those who don’t file ITR may find it very difficult to get their loan request approved by any formal lender.

So, if you are planning to get a loan in near future, ensure that you are filing your returns on time.

5. Carry forward losses

As per the Income Tax rules, you can carry forward losses to subsequent years if filing ITR before the due date. This provision will help you in reducing your tax liability from any future income.

Apart from the above, taxpayers who file their ITR on time also get their Income Tax Refund faster than others.