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Top 10 Benefits of Filing Income Tax Return (ITR) Before July 31, 2024

Benefits of Filing Income Tax Return Before July 31, 2024

Updated on: 23 Jul, 2024 12:10 PM

The last date to file the income tax return (ITR) for the assessment year 2024-25 (FY 23-24) is July 31, 2024, and if you are in a never-ending battle with your Income Tax Return, you should consider e filing of Income Tax Return early as filing an ITR early has ample benefits, and you can avoid troubles that might occur if you file your ITR close to the deadline or after the deadline. To get you out of the practice of filing your return close to the due date, we have compiled a list of the most irresistible benefits to filing your Income Tax Returns early.

Top 10 Benefits of ITR Filing

Given below are the top benefits of filing an ITR -

Faster Refund Process -

You read it right! The refund of tax is processed on a first come first serve basis. This means if you file your return early, your refund will be processed earlier than those who wait until the end. So why wait until the last date to file your ITR?

More Time to Review and Revise Your Income Tax Return:

Okay, we all have been in that situation where we made a mistake in ITR and found it later. Filing a return doesn’t make any difference if you don’t verify it, after completing the filing process, it is mandatory to verify the ITR within 30 days unless it will be void and considered not filed. Early filing of ITR makes sure that you get enough time to review all the details and correct if it has any mistakes. However, for those who are unable to avoid silly mistakes, the department gives you time to revise and re-revise your Income Tax Return. Although this is possible only if you file your return within the time frame of the due date.

Take Benefit of Your Losses

None of us likes incurring losses. However, what if you could deduct these losses from your next year's income? If you file your ITR on time and notify the government about your losses, you can carry forward them and set-off against the profits of next year.

Avoid Legal Repercussions: and Penalties for Late Filing

Missing the July 31st deadline for your ITR isn't ideal, but you can still file it! There might be some financial implications depending on your income and tax situation. If you earn more than Rs. 5 lakh annually and file between August 1st and December 31st, 2024, a late filing fee of up to Rs. 5,000 applies. This penalty reduces to a maximum of Rs. 1,000 for those earning below Rs. 5 lakh during the same filing period. It's important to note that if you owe taxes and file late, there could be an additional 5% penalty on the unpaid amount, along with interest charges. However, if you're expecting a tax refund, there's no penalty for filing late. You can still file the belated ITR. Though there are penalties, it’s better than not filing it all.

Minimize the Risk of Error

Get a head start on your ITR by filing early! This gives you ample time to collect all the required documents and ensures you have everything for an accurate tax return. Here's what you'll need: Aadhaar, PAN, Form 16, salary slips (if applicable), interest certificates from banks/post offices, proofs of tax-saving investments, and health insurance premium receipts.

Excess TDS Claim

Tax can be taken from your salary, fixed deposit or any other source, even if your income is not subject to tax. For example, if your annual income is Rs.2.5 lakhs, but you received Rs.1 lakh from an FD in bank, then the bank must deduct 10% from this amount. This TDS deducted can be claimed by the taxpayer while filing an ITR.

VISA Application

Submitting your previous year’s ITR while submitting your Visa application reduces the chance of rejection of your visa. Additionally, many countries specifically demand taxpayers to submit their ITR along with their visa application. For example, if you want to apply for a schengen visa, you need to submit previous 3 years tax returns

A Reliable Proof of Income

An income tax return serves as an authentic documentation for the proof of address and the proof of income. You can use your ITR to obtain an aadhaar card. The ITR filing form serves as actual income verification for individuals.

Important Document for Loan Application

When you apply for a loan to buy something like a house or a car. You might be required to submit other documents too like PAN card, aadhaar card, licenses and photo identification. In addition to the above, the banks also demand the income proof or the ITR of the individual to assess the credit worthiness of the taxpayer.

Funding for Startup Ventures

When planning to launch a new company or expand an existing one, you might need funding from external sources like venture capitalists or seed investors.

These investors may ask for details of your ITR to assess the business's financial stability and profitability. They might also use your ITR forms to cross-check the data in the audited report.

File your Return in 5 Easy Steps here.

There are various benefits of filing an ITR. The above mentioned are just a few of the long list of ITR filing benefits.

Now that you are aware of the benefits, make sure you file your ITR, even if you don’t have a taxable income.

The last date for income tax e-filing is 31st July 2024. File your ITR now to avoid delays, penalties and notices and claim the multiple benefits of ITR filing. And if you find taxes complicated And if you need assistance while filing your Income Tax Return, our team of expert CAs will help you understand taxes and file your ITR. Book eCA Now!

Frequently Asked Questions

Q- What happens if ITR is not filed before 31st July?

It's important to file your ITR on time to avoid penalties. However, for individuals with a taxable income not exceeding Rs 5 lakh, a penalty of Rs 1,000 applies for filing a belated ITR. This penalty must be paid even if no tax payment is required.

Q- What are the benefits of filing income tax return?

Filing an Income Tax Return (ITR) is crucial for nation-building and provides several benefits. It enables you to claim TDS refunds, simplifies loan applications, and allows you to carry forward losses. Additionally, you can claim deductions and exemptions under the Income Tax Act, 1961.

Q- Can I file ITR early?

The earliest date to file an Income Tax Return is April 1st of the Assessment Year. For example, for AY 2024-25, you can start filing on April 1, 2024. If you miss the due date, you can still file your ITR, but it must be done before December 31st.

Q- Can I revise my ITR before 31 July?

Under the Income Tax Act, the revised return due date under Section 139(5) is December 31st of the relevant assessment year or before the completion of the assessment, whichever comes first. You can file a revised return even if the original return has already been processed by the tax department.

Q- Will the ITR deadline be extended for 2024?

Due to various technical and procedural issues, there is increasing demand among taxpayers and tax professionals to extend the ITR filing deadline. However, the tax department has not indicated that the deadline will be extended beyond July 31.

Q- What is the last date of an income tax return?

The deadline for filing income tax returns (ITR) is approaching. The last date to file without late fees for the financial year 2023-24 (assessment year 2024-25) is July 31, 2024.

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