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The Income Tax department has urged the taxpayers to not wait until the last minute for filing their income tax return (ITR). The due date for filing ITR of the assessment year 2022-23, is scheduled for July 31, 2022. The department has reminded taxpayers to not delay and file their ITR today as the due date is approaching soon. Also, the department asked taxpayers to e-verify after filing. ITR forms enable a taxpayer to report their incomes and taxes to be paid in a financial year to the department. It is mandatory to file your ITR if your income is more than the basic exemption limit.

There are currently seven ITR forms available for different categories of taxpayers.

ITR form 1 (Sahaj) and ITR form 4 (Sugam) are simpler forms that cater to a large number of small and medium taxpayers. Sahaj can be filed by an individual having income up to 50 lakh and who receives income from salary, one house property / other sources (interest etc.). Along similar lines, Sugam is filed by individuals, Hindu Undivided Families (HUFs), and firms (other than Limited Liability Partnerships (LLPs)) having total income up to 50 lakh and income from business and profession computed under the presumptive taxation provisions.

Further, individuals and HUFs not having income from business or profession (and not eligible for filing Sahaj) can file ITR-2 while those having income from business or profession can file ITR Form 3. Persons other than individuals, HUF, and companies i.e. partnership firms, LLP, etc. can file ITR Form 5. Companies can file ITR Form 6. Trusts, political parties, charitable institutions, etc. claiming exempt income under the Act can file ITR-7.

IT department on Saturday said, “The due date to file ITR is approaching! Don't forget to file ITR for AY 2022-23 before 31st July 2022. Fie today and avoid the stress of filing last minute."

Here are five reasons why filing your ITR on time should be practiced:

Technical issues:

Since the time income tax e-filing portal has been launched in June last year, there have been several occasions where the system has faced technical issues and glitches which have further disrupted taxpayers' income tax return filing, or any other tax obligations for a brief time.

Earlier this month, on July 2, the Income Tax Department said that they have noticed taxpayers are facing issues in accessing the ITD e-filing portal. Infosys who is the vendor of the e-filing portal said that there has been some irregular traffic on the portal for which proactive measures were being taken.

Last month, there was another malfunction in the functionality of the e-filing website. Not to forget, right after the portal was launched on June 7 last year, it faced numerous glitches in its functioning. So there has been a history of technical issues on the e-filing portal.

Thereby, it is always better to be prepared and file your ITR on time or probably well before the deadline in order to avoid any possibility of glitches that could delay your filing process. There can be huge traffic of last-minute filers of ITR on the system.

Chances of Errors:

A last-minute rush to file ITR can open the possibility for errors and mistakes which may lead to the rejection of your returns by the department. Untimely ITR filing has been seen as one of the mistakes that could result in an error.

Some of the most common errors are - filing incorrect ITR forms, quoting the wrong assessment year, and incorrect personal information like name, date of birth, PAN, and bank details. Further, there may also be factual errors, calculation mistakes, income incorrectly mentioned, and missing out on additional details of investments and other incomes among others.

It is always better to have ample time beforehand when you file your ITR. This helps you be calm and prepared in filing and also rechecking your documents thoroughly.

As per the IT department, a request for rectification can be submitted on the e-Filing portal if there is any mistake apparent from the record, in an Intimation issued u/s 143(1) or order u/s 154 by the CPC or by the Assessing Officer (where rectification rights are transferred by CPC) . A rectification request can be submitted only for returns that are already processed by CPC.

Further, the department directs that rectification can be made of tax liability, gross total income, total deduction, and personal information by taxpayers on the e-filing portal.

Penalties:

If you fail to file your ITR on time, then you will be liable to pay a certain amount as a penalty to the department.

The section 234F of the Income Tax Act says, "without prejudice to the provisions of this Act, where a person required to furnish a return of income under section 139, fails to do so within the time prescribed in sub-section (1) of the said section, he shall pay, by way of fee..."

There is 5,000 penalty if the returns are furnished on or before December 31st of the assessment year. While the penalty will be 10,000 in any other case.

It needs to be noted that if the total income of the person does not exceed 5 lakh - then the fee payable under this section shall not exceed 1,000.

You can carry forward your losses:

If you file your income tax return in time, then you will be able to carry forward your losses to subsequent years. There are two types of adjustments to losses.

As per the IT Act, if in any year the taxpayer has incurred a loss from any source under a particular head of income, then he is allowed to adjust such loss against income from any other source falling under the same head. The process of adjustment of loss from a source under a particular head of income against income from other sources under the same head of income is called an intra-head adjustment, e.g. Adjustment of loss from business A against profit from business B.

Further, it is explained that if in any year, the taxpayer has incurred a loss under one head of income and is having income under another head of income, then he can adjust the loss from one head against income from another head, E.g., Loss under the head of house property to be adjusted against salary income. This is called an inter-head adjustment.

However, notably, the losses can be carried forward only if the return of the income/loss of the year in which the loss is incurred is furnished on or before the due date of furnishing the ITR as prescribed under section 139(1).

Filing ITR helps you in your TDS claims:

Tax deducted at source (TDS) is a very common deduction from an individual's salary or income from other sources. However, TDS can be claimed back by filing ITR. During the e-filing, a taxpayer should sum up his or her income from various sources which will result in tax liability, and then subtract them with the amount of TDS applied to your income. If a taxpayer's TDS is higher than his or her total tax liability in a financial year - this means the refund is due from the government. For TDS, a taxpayer will have to submit Form 16 which can be availed from their employer.

By filing ITR on time, you can receive your TDS refund in your bank account in a matter of months.

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