Should You File Your Income Tax For FY24 Early Or Closer To The July 31 deadline?

Waiting until closer to the tax deadline allows people to assess their finances better. By waiting until mid-June, taxpayers can clearly see whether they have included all income and deductions, potentially lowering the risk of mistakes that result in penalties.
Tax, Income Tax, FY24
Tax, Income Tax, FY24

To avoid late fees, you need to file your Income Tax Return (ITR) for FY 2023-24 (AY 2024-25) by July 31, 2024. If you file after this date,  you will have to pay interest under Section 234A and a penalty under Section 234F. However, if you miss the initial deadline, you can still file a belated return before December 31, 2024. 

Tax return filing is contingent on a number of variables, including sources of income, vendor/employer compliance,  documentation availability, and so forth. However, early filing of income tax returns is advised over delaying until the deadline. 

Says Suneel Dasari, founder and CEO of EZTax: “If you have regular income such as salary, interest, and so forth, you may begin submitting your ITR on May 15. This is because the majority of companies release Form 16 in May.” 

According to tax experts, filing early offers the benefit of receiving your refund sooner and provides extra time for making corrections without penalties. “However, for salaried individuals and those with income where taxes are deducted at source (such as salary and dividend income), it may be prudent to wait until June to file your return. The deadline for issuing Form 16/16A is June 15, allowing you to confirm your return and TDS  aligns with the tax authority’s portal records. This reduces the risk of discrepancies and follow-up questions. Therefore, while early filing has advantages, waiting until you have all the necessary documents ensures accuracy and compliance,” says Abhishek Soni, CEO, Tax2Win, an Income Tax portal. 

In the case of intricate income scenarios involving PMS (Portfolio Management Services), equity shares, mutual funds, dividends from multiple shareholdings, and so forth, the brokers and companies may require a certain period of time to update the tax deducted at source (TDS) on Form 26AS.

“In general, however, this information will be revised by the first week of June, given that the deadline to file TDS returns is May 31. Consequently, all taxpayers are encouraged to submit their tax returns by June as opposed to waiting until the deadline. Taxpayers who file their returns in advance will receive their refunds sooner, will avoid accruing interest on overdue payments, and will enjoy greater peace of mind,” adds Dasari. 

Individuals whose complete income is already on record with the tax department can utilize the details in their Annual Information Statement (AIS) to file returns and claim refunds early, without waiting for Form 16 from their employer. Also, people who have had one per cent tax deducted at source (TDS) deducted on property deals, even when the property was sold at a loss, can file their ITR early. Moreover, non-resident Indians (NRIs) who solely earn capital gains from property sales in India and do not have any other sources of income, can choose to file their return early, because their information is already shown in their AIS and Form 26AS. 

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