Income Tax Returns Filing 2018 Offline and Online: The deadline to file Income Tax Returns is fast approaching. People who need to file ITRs need to file them before July 31. There are several benefits that a person loses if s/he files the return after the deadline. Income Tax Return is a proof that the person has paid his/her tax. It contains details of an individual’s annual income and the amount of tax you have paid. Every year, Indian citizens who earn taxable income have to file Income Tax Return. Filing ITR helps them in getting a refund in case they pay more tax than what they are required to pay.
Here are the top 5 reasons why you should file Income Tax Returns on time:
1- Higher penalty: The deadline to file the ITR is July 31. If an individual fails to file the ITR’s for the assessment year 2018-19, s/he will have to pay a penalty up to Rs 10,000 for late payment. If the person file returns after July 31 and on or before December 31, s/he will be fined Rs 5,000. However, if they file after December 31, they will have to pay Rs 10,000 as a penalty. The penalty is applied to individuals with a taxable income of over Rs 5 lakh. If the taxable income is Rs 5 lakh or less, then the penalty will be Rs 1000.
2- Interest per month: If a person fails to file the returns on time, then apart from the penalty of Rs 5,000 or Rs 10,000, individuals have to pay 1 per cent penal interest on the tax amount which is due. This means if the taxable amount is of Rs 20 lakh and the unpaid tax amount is Rs 10,000, then if the person files returns on January 1, s/he will have to pay an interest of 1 per cent for the period August to December. For five months, the amount would be Rs 12,000 ( Rs 2,000 penal interest plus Rs 10,000 penalty).
3- For loans and visas: I-T returns are important to avail various services. If someone is applying for visas, several countries ask for the candidates three to five years of income tax return details to issue the visa. Even banks ask for the ITR details to process loans.
4- Create favourable financial history: Online filing of ITRs actually creates a history of an individual’s financial records with the tax department in a much faster and easier way. This history is favoured by a lot of organisations, be it financial or otherwise, whom you might have a business relationship with in the future.
5- Buying higher life covers: Buying life cover of Rs 50 lakh or Rs 1 crore has become pretty common nowadays. However, these covers are available against your ITR documents to verify your annual income.