File tax returns on time to avoid unnecessary hassles
File returns on time
This can prove to be costly for the taxpayer who has incurred losses and wants to carry it forward to the future years (short-term capital loss, house property and loss). Under tax laws, if returns are filed after the due date, losses cannot be carried forward for being set-off against the income in future years. Therefore, it is essential to file returns within the stipulated timeframe.
A two-year window
Income tax authorities maintain that returns can be furnished at any time before expiry of two years from the end of the financial year in which the income was earned. However, if you have tax outstanding and you do not pay your tax, then a simple interest of 1% per month will be charged on the amount that is outstanding.
Filing tax returns is a task we know is compulsory and has to be done on time, yet we tend to procrastinate and wait till the last moment. As a result, in a hurry you might tend to forget to disclose some items which may prove to be an invitation to the tax authorities to get after you. To protect yourself from coming under the scanner of the tax man, do your bit by ensuring there are no mistakes while filing tax returns.
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