Filing your income tax return (ITR) on time is crucial, and the Income Tax Department strongly advises against waiting until the last minute. It’s not just a suggestion; it’s a legal obligation. Failure to comply can result in financial penalties and legal consequences. Here’s why you should prioritize timely filing and some common pitfalls to avoid.
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Five Reasons To File ITR On Time
1. Avoid Penalties
If you miss the deadline, the Income Tax Act imposes penalties. Section 234F states that a person failing to file their ITR on time must pay a fee. The penalty is ₹5,000 if filed by December 31st of the assessment year and ₹10,000 in any other case. However, if your total income doesn’t exceed ₹5 lakh, the fee is capped at ₹1,000.
2. Rectification Challenges
If errors surface after processing, rectification requests can be submitted on the e-Filing portal. However, this option is only available for returns already processed by the Central Processing Centre (CPC). Rectification can be made for tax liability, gross total income, total deduction, and personal information.
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3. TDS Claims
Filing ITR helps you claim back Tax Deducted at Source (TDS). Summing up income from various sources, you can calculate your tax liability and offset it against the TDS applied. If TDS exceeds your tax liability, you are eligible for a refund. Ensure you submit Form 16, available from your employer, during e-filing.
4. Avoid Technical Glitches
The income tax e-filing portal occasionally experienced technical issues since its launch. These glitches can disrupt the filing process. Filing well before the deadline provides a buffer, minimizing the impact of any temporary system problems.
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5. Increased Error Risks
Rushed filing increases the likelihood of errors, such as using incorrect ITR forms, quoting the wrong assessment year, and providing inaccurate personal information. These errors can lead to rejection by the department.
