The process for filing Income Tax Returns (ITR) for the financial year 2023-24 (assessment year 2024-25) has commenced on the e-filing income tax portal. The commonly used ITR forms were made available on April 1, providing an opportunity for early and convenient tax return filing. However, salaried individuals are advised to wait until June 15 to file their returns. Here’s why.
Also Read– Income Tax Return Filing: Don’t have Form 16? Use these alternatives to file ITR
Why Should You Wait Till June 15?
Although ITR forms are accessible from April, waiting until June 15 is crucial for salaried individuals. This is because their Annual Information Statements (AIS) and Form 26AS are typically fully updated by May 31. Additionally, TDS certificates are generally issued within 15 days after this date. Filing returns with incomplete data can lead to penalties if income is underreported due to missing information. Therefore, to ensure accuracy, it is prudent to wait until June 15 before filing.
Banks and other financial institutions are required to file an annual Statement of Financial Transactions (SFT) with the income tax department. These SFTs provide comprehensive information about numerous transactions made by taxpayers throughout the financial year. These include income from stocks, mutual funds, dividends, interest from savings bank accounts, fixed deposits, public provident fund accounts, and credit card bill payments. Once these institutions file their SFTs, the AIS is updated accordingly.
Read More: Advance Tax Payment First Instalment Deadline: Know Who Needs To Pay, Check All Details Here
What Is AIS and Form 26AS?
The AIS keeps a complete record of an individual’s financial transactions, regardless of whether tax was deducted. It includes details such as total salary income, tax deducted and deposited, and interest collected from savings bank accounts, even if no tax was paid on the interest. The tax deductor, which might be a company or a bank, has until May 31 to complete a TDS return for the fourth quarter of the financial year. Once the TDS return is filed, the tax deposited against the relevant PAN is recorded in Form 26AS, which serves as a tax passbook displaying the total taxes deducted/collected against a PAN. Form 26AS also includes TCS deductions for foreign travel and remittances.
Ensuring Accurate Tax Filing
Filing an income tax return with incomplete data from AIS can result in an income tax notice for underreporting income. According to income tax regulations, a deductor must provide a TDS/TCS certificate when filing a TDS/TCS return. The deadline for issuing TDS certificates is 15 days after filing the TDS return. Consequently, employers must provide Form 16 (TDS certificate) by June 15. Similarly, banks, mutual funds, or companies that deducted taxes during the financial year 2023-24 must issue Form 16A (TDS certificates) by this date. It is essential for taxpayers to ensure that the tax deducted on Form 16/Form 16A matches the information on AIS and Form 26AS to avoid complications.
Read More: Income Tax Return: Why should you wait till June 15 to file your ITR for FY24?
Penalties for Inaccurate Reporting
Filing inaccurate income in your ITR can have severe consequences. The assessing officer may classify this as either misreporting or underreporting of income, leading to penalties ranging from 50 per cent to 200 per cent of the tax due on the underreported amount, as per Section 270A of the Income Tax Act, 1961. Therefore, it is crucial to ensure that the income reported in the ITR is accurate.
Option for Revised ITR
If an individual discovers that they have filed their ITR with incorrect income information, they have the option to file a revised ITR by December 31, 2024. However, it is always better to file the original ITR with correct and comprehensive income details to avoid any complications.
Read More: ITR filing 2024-25: Understanding Form 16, issue date, and importance
Exceptions to Waiting Until June 15
In cases where no TDS has been deducted from an individual’s income, no TCS has been collected, and the individual has complete information about their total income earned from various sources during the financial year 2023-24, they may file their ITR without waiting until June 15. This exception applies to those with straightforward income details who do not rely on additional statements or certificates for their tax filings.
