The income tax department has postponed the ITR filing due dates for Financial Year 2019-2020 from July 31st to November 30th, 2020.
Even though the deadline has been extended experts advise not to wait till the last date to file their tax return.
This extension was given to provide relief to taxpaying entities in these stressful situations of the COVID-19 pandemic. And also provides the tax officials with the room to ensure compliance with regulatory and statutory requirements across all sectors.
It is to the taxpaying entities' benefit that the filing is not left to the last day of the extended tax filing period. As waiting till the last minute to file a tax return may lead to errors.
Here is why you shouldn’t wait till the deadline
1. Avoid Last minutes errors
ITR Filings requires diligent care and attention to ensure that all the numbers are correct and accurate. You need to have all the documents, tax statements, Interest Income certificate, etc. ready to ensure that all the details mentioned are correct and error-free. Doing it carefully will avoid rectifications and revisions later.
2. Late Interest Payment
Taxpaying entities whose tax liabilities are greater than 1 lakh rupees, should try to file their tax returns as early as possible since they would be subject to increased interest payment on the month on monthly basis. Filing to file ITR on time attracts interest at the rate of every month.
3. Quicker Refund Processing
In case you have a tax refund due, the payment will be delayed. As the tax department will start processing the refunds only after you file the belated return.
The tax department pays interest on refunds from the date of filing of return in case of late returns. So, in case you delay filing the belated return, you will lose on the interest payment on your tax refund, if any.
4. Carry forward losses
There is a provision to carry forward losses from one financial error to another. However, taxpayer entities can avail of this only if they file their ITRs before the due date.
Also, taxpayer entities must remember that filing ITR after the due date is also allowed up to a certain period. However, the subject to pay a penalty in this case. Not filing returns at all could make one punishable under the Income Tax Act as tax evasion is a criminal offense.