Home / Money / Personal Finance /  Don't wait till December 31 to file your ITR. Here's why

Paying taxes on time to the government is the duty of every tax payer. It is better to be disciplined to avoid any penalties in case of delay in filing income tax every year. The last date for filing belated or revised ITR for AY20 has already been extended several times this year in the wake of the covid-19-induced lockdown. On Saturday, the income tax return department has again postponed the ITR filing due dates for AY 2020-21 (FY 2019-20) from November 30 to December 31, 2020 for that tax individual’s taxpayer where tax audit is not applicable. For Individual taxpayers who need to get their accounts audited, the last date of return filing has been shifted from October 31, 2020 to January 31, 2021. But it need not be beneficial for every tax payer to wait till the last date to file income tax return. Here are the two reasons:

Delay in filing ITR translates to delay in claiming tax refunds

Taxpayers who are expecting refunds should file early for their refunds to be processed earlier. ITR filings that are done earlier get verified earlier, thus resulting in faster tax refunds. Income department usually takes around one month to process refunds.

"In case a tax payer needs a refund of excess tax, TDS or TCS, an early filing of ITR enables early processing of the re

Filing ITR after the due date is also allowed up to a certain period. However, taxpayers are required to pay a penalty in this case. Not filing returns at all could attract punishment under the Income Tax Act as tax evasion is a criminal offense.

Pay higher interest under Section 234A

An individual whose tax liability exceeds 1 lakh and who is not required to get the accounts audited should not wait till the last date to file ITR to limit the interest outgo under section 234A of the Income Tax Act.

"Those individuals whose are not required to get their accounts audited but whose self-assessment tax liability exceeds the limit of Rs1 lakh should not wait until extended due dates 31st December, 2020 because the interest under section 234A shall be charged from the due date 31st July, 2020 to the actual date of filing the Income-tax return in this case. Therefore such a taxpayer should file his income tax return as early as possible to minimize the interest under section 234A," says Kapil Rana, founder and Chairman, HostBooks.

Interest u/s 234A for other taxpayers whose self-assessment tax liability does not exceed the limit of 1 lakh shall be charged from the extended due dates 31st December, 2020 to the actual date of the filing Income tax return.

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