From the Prime Minister to your office colleague, everyone seems to be talking about one thing, taxes! The tax deadline is here. And the due date for filing income tax returns for FY 2015-16 (AY 2016-17) is 31st July.
Here are 5 benefits of filing your taxes by this date –
Revision is possible
Many a times, taxpayers commit mistakes while submitting their returns. An incorrect mobile number or forgetting to claim a deduction are common errors. Sometimes an income may not have been included. Filing your returns by due date makes revision possible.
Income tax department has been processing refunds faster for returns filed on time. Delays in filing also means delay in receiving refund. Last year, the department processed refunds within 2-3 weeks of filing. So if excess TDS has been deducted on your income, do not delay your filing.
Paying tax dues timely
A lot of taxpayers see a tax due in their return after they consolidate their incomes and prepare their submission. This may happen due to inclusion of interest income. If there is a tax due, interest keeps accumulating until it is paid. So filing on time makes sure taxes are paid in time and interest (under sections 234B and 234C) does not keep adding up. Why shell out extra money when you can file on time and save on penal interest?
Avoiding interest under section 234A
Though interest under 234B and 234C is levied if there is tax due and taxpayer did not pay advance tax; taxpayers can avoid paying interest under section 234A by filing their return on time. This interest is charged @ 1% per month. It is calculated from the due date till the date on which you actually file your return.
Carry forward your losses
A lot of taxpayers have short term losses from equity shares. These losses can carried forward in your tax return and set off from capital gains in succeeding 8 years. To be able to do this, your return must be filed within the due date. Losses from business and profession are also allowed to be carried forward when return is filed on time. So remember to file on time if you have losses.
This article was published on Yahoo Finance on 26 July 2016.