Filing Income Tax Returns (ITR) is a legal obligation for every individual and entity whose income exceeds the prescribed limit. However, many taxpayers tend to delay filing their returns, which can have various adverse consequences. In this article, we’ll discuss the importance of filing Income Tax Returns within the due date and the benefits it provides.

1. No option to switch between Tax Regime:

One of the major disadvantages of filing Income Tax Returns after the due date is the unavailability of the option to switch between the old and new tax regimes. If taxpayer having income from business/profession  files their return after the due date, they will have to follow the old tax regime, even if they intended to switch to the new one.

2. Avoiding Penalties and Fines:

Late filing of Income Tax Returns can attract various penalties and fines. The penalty for filing ITR after the due date is ₹5,000 if filed before December 31st, and ₹10,000 if filed after that. This penalty can increase up to ₹1 lakh in some cases. Therefore, it is crucial to file ITR on time to avoid such penalties.

3. Avoiding Interest on Income Tax:

If a taxpayer fails to file ITR on time, they may also have to pay interest on the tax amount due. The interest is charged at the rate of 1% per month or part thereof, starting from the due date until the tax is paid. This interest can accumulate quickly and add to the taxpayer’s financial burden. Filing ITR on time can help avoid this interest.

4. Chance to Revise Returns:

Filing ITR on time also provides the taxpayer with a chance to revise their returns if required. If the original return is filed within the due date, the taxpayer can revise it any time before the end of the assessment year. However, if the original return is filed after the due date, the option to revise the return is not available.

5. Carry Forward Losses:

Filing ITR on time also allows taxpayers to carry forward their losses from the previous year. If the return is not filed on time, the taxpayer loses the right to carry forward their losses, which can result in a higher tax liability in the future. In conclusion, filing Income Tax Returns on time is critical for avoiding penalties and fines, interest on tax amounts due, and for availing various benefits such as revising returns and carrying forward losses. Therefore, it is essential to file ITR before the due date to avoid any unwanted consequences.https://camanisha.com/contact-us