Income Tax Returns (ITRs) must be filed by individuals and salaried employees whose accounts are not required to be audited by July 31 for the FY 2022-23. Taxpayers must submit their ITR FY 2022-23 online before the end of the deadline to avoid any fines or penalties. According to the website of the Income Tax Department, the penalty for filing a late ITR is Rs 5,000 but it doubles that amount for later filings.
Many people assume that filing an ITR is a legal process through which we let know our taxable income to the Income Tax department. But let us tell you that it is more than providing information about our income and expenses. Let’s know about them
Not filing an ITR by the due date may invite a Rs 10,000 penalty and other consequences per the Income Tax Rules. Under Section 234A of the Income Tax Act 1961, delay in ITR filing can also lead to interest on the tax payable.
It is easier to get your loans approved by lenders if you have a clean track record in Income Tax Returns filing. In the case of a loan application, banks require the borrowers to provide a copy of the ITR statement as proof of their income. Income Tax Returns are a mandatory document for any formal loan approval. Individuals who don’t file ITR may struggle to get loans approved from institutional lenders.
Section 70 and 71 of the Income Tax Act 1961 contains some provisions for carrying forwarding losses of a particular year to the subsequent year. This means that you can move your loss to the next assessment year.
Helps claim tax deductions
If you have filed your ITR, then the government allows certain deductions to you which helps to reduce the burden on the taxpayers and also encourages more people to pay their taxes. These deductions and exemptions can be availed in some investments. You can also claim back TDS and rebates.