Here is why you should file your income tax returns on time

When the thought of paying income tax on our hard-earned money in itself is a detestable exercise, how can the process of filing income tax return be likable? However, dislike should not turn into inaction. Why? Because postponing income tax returns filing to the very last day or even crossing it comes at a big cost. So we tell you here why you should file your income tax returns on time:

1. Higher penalty

This assessment year (AY2018-19) is on and if you don't file your ITR by the deadline of July 31,  you face the prospect of having to pay a penalty of up to Rs 10,000 for late payment. If you file returns after 31 July and on or before 31 December, you will have to pay Rs 5,000 as penalty. However, if you file returns after 31 December, you will have to pay a fine of Rs 10,000. This penalty is applicable for those who have a taxable income of more than Rs 5 lakh. If your taxable income is up to Rs 5 lakh and you have delayed your ITR, you will have to pay Rs 1,000 penalty.

2. Penal interest

Besides the applicable higher penalty, you will also have to pay 1 per cent penal interest on the tax amount that is due. For example, if your taxable income is Rs 10 lakh and your unpaid tax amount is Rs 20,000, and you file returns on 1 January, you will have to pay an interest at 1 per cent for August to December. For five months, this will amount to Rs 11,000. Rs 1000 penal interest and Rs 10,000 penalty.

3. problem in availing loans, visa, credit cards
 
It is easier to avail various services like home loans, visa, and credit cards etc if you submit your ITR details on time. Several countries ask for five-year income tax return details as part of the visa issuing process. Besides, banks demand ITR history to process home loans. Financial institutions generally prefer going through your income-tax returns to check your financial history before deciding whether to lend to you or not.

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4. Get to avoid stress, last-minute rush

The system on which ITR is filed gets busy nearer to the deadline. An already stressful you may find it overwhelming to finish ITR filing process if system goes kaput intermittently.

5. Get enough time to correct errors

Income tax return filing is not easy. Collecting documents, doing all the calculations is time-taking and prone to errors. In a haste to meet the deadline, you may forget one or the other sources of income or miss claiming a deduction. Filing your return on time give you enough leeway to eliminate errors. For AY2018-19, the deadline for filing revised returns is March 31, 2019.