The last date of filing income tax returns (ITR) for individuals and salaried employees for FY 2021-22 is July 31. Taxpayers must file their ITR before the deadline to avoid any penalty.
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Waiting till the last date to file the ITR may lead to erroneous entries. Hence, it is advisable for taxpayers file their returns ahead of the deadline.
Here’s a look at five benefits of filing the ITR on time
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Avoid Penalty
Those who do not file their ITR by July 31 will have to pay a penalty of Rs 10,000. Till assessment year (AY) 2017-18, no fine was levied on taxpayers for filing belated income tax returns. However, the penalty was introduced from AY 2018-19 by inserting the new Section 234F into the Income-tax Act, 1961. The government further amended the section in Budget 2021, reducing the time limit to file belated ITR by three months i.e., till December 31.
Avoid legal action
The Income Tax Department may send a notice to the taxpayer in case of delay or default, which could be followed with a legal case if the department is unsatisfied with the response.
Proof of income
For those who are self-employed or freelancers, the ITR receipt serves as a document of their income proof. This helps them in several funding and transactional matters.
Easier visa applications
Foreign countries often ask for ITR as proof of funds to meet necessary travel expenses when a person applies for visa. For instance, ITR proofs are required to apply for visas for the US and Canada and some countries in Europe.
Faster loan processing
While applying for loans, the borrower needs to submit ITR receipts for the last three years. The bank uses the ITR to assess the financial ability of the individual to repay the loan amount. Filing the returns on time helps the individual to get loans processed swiftly.
