Benefits of filing Income Tax Return before 31 March 2018

Posted by Namita Gad on 14 Mar, 2018

Benefits of filing Income Tax Return before 31 March 2018

Are you receiving text messages from the Income Tax Department saying – “It is seen that you have not filed the IT Returns for AY2016-17 and AY2017-18. Please file IT Returns at the earliest. Kindly ignore if already filed”? If you are, and you are ignoring the messages without filing the tax returns, then consider the below repercussions to change your mind. Though you have already lost advantages of filing a timely return; such as revision of returns, carry forward of losses, no interest on taxes; you still have time to at least file belated return before it gets time-barred.

Why you should get your income tax returns for AY2016-17 and AY2017-18 filed before 31st March 2018?

Claiming Refunds: Wouldn’t it be great to get a refund of money from the Government? You are entitled to get tax refund from the revenue department if you have paid excess tax by way of advance taxes or TDS on salary/other income. However, these refunds can only be claimed if you file your tax returns. It sometime happens that people are not aware about their tax deductions. You can view all your tax deductions (TDS) for the year in Form 26AS by logging in to the income tax website. File your returns to claim tax refunds.

Avoid Scrutiny Notices: If your income exceeds threshold limit prescribed by the Income Tax Law or you have deposited considerable amount of cash to your bank accounts during demonetization period, then non-filing might invite scrutiny assessment. It is advisable to file tax return to avoid chances of receiving prosecution notices from the department.

Rectify your Mistakes: If you have already filed your return before due date for AY2016-17 & AY2017-18 and found some of the incomes unreported or under-reported, then you still have time to revise your return to correct manual errors. With the advancement in technology and process-automation, the IT department has instant access to your financial information. So, avoid intentional evasion of taxes and revise the returns, if return already filed is incorrect.

Carry Forward Losses from House Property: If you have a housing loan and regularly pay EMIs, then you can claim a deduction of interest on housing loan. Thus, reporting a negative income will allow you to set off such interest amount against income for subsequent years.

Build Eligibility for Loan & Credit Card: Filing regular income tax returns helps building eligibility for loan and credit card limit. Your income tax return for the last three years is the basic requirement criteria while applying for a loan which assists bankers to assess your repayment capacity.

Obtaining Visa: Consulates of many foreign countries ask you to furnish income tax returns of the past three years or the current year (even if your income is nil) for processing visa. Absence of filed returns might reduce chances of getting visa.

Buying high-cover Insurance Policy: Insurance companies nowadays verify your income from tax returns before allotting the policy if you wish to opt for high life insurance cover.

Thus, filing tax returns does not just fulfil a compliance requirement, but also benefits in other financial and personal matters. Tax Return for AY2016-17 and AY2017-18 cannot be filed after 31st March 2018.