How to File Your ITR Before July 31 and Avoid Paying a Huge Penalty -

The deadline for filing your income tax return (ITR) for the assessment year 2023-24 is just around the corner. If you miss the July 31 deadline, you may have to pay a hefty penalty and face other consequences. Here is everything you need to know about filing your ITR before the due date and avoiding any trouble with the tax department.

Why You Should File Your ITR Before July 31

Filing your ITR before the due date has many benefits. Some of them are:

You can claim your tax refund faster. If you have paid more tax than your liability, you can get it back by filing your ITR on time. The tax department usually processes the refunds within a few months of filing the return.
You can avoid paying interest and penalty. If you file your ITR after the due date, you will have to pay interest at 1% per month on the unpaid tax amount. You will also have to pay a late filing fee of Rs 5,000 if you file your return by December 31, and Rs 10,000 if you file it after that. However, the penalty is limited to Rs 1,000 for those whose income is less than Rs 5 lakh.
You can avoid getting a notice from the tax department. The tax department may send you a notice under Section 142(1) of the Income Tax Act, asking you to file your return within a specified time. If you fail to comply, you may face further action such as penalty, prosecution, or assessment.
You can carry forward your losses. If you have incurred any losses from business, profession, or capital gains, you can carry them forward for up to eight years and set them off against future income. However, this benefit is available only if you file your return on time.
You can avail certain deductions and exemptions. Some of the deductions and exemptions that are available only if you file your return on time are:
- Deduction under Section 80C for investments in provident fund, life insurance, etc.
- Deduction under Section 80D for health insurance premium
- Deduction under Section 80G for donations to charitable institutions
- Exemption under Section 10(10D) for maturity proceeds of life insurance policies
- Exemption under Section 54/54F for capital gains from sale of house property

How to File Your ITR Before July 31

Filing your ITR before the due date is not a difficult task if you follow these steps:

Choose the right ITR form. There are seven types of ITR forms available, depending on your source and amount of income. You can check which form is applicable for you on the e-filing website of the Income Tax Department.
Collect all the relevant documents. You will need documents such as Form 16, Form 26AS, bank statements, investment proofs, etc. to fill in the details of your income, deductions, taxes paid, etc.
Verify your pre-filled data. The e-filing website will automatically fill in some of the data in your ITR form based on the information available with the tax department. You should verify this data and make any changes if required.
Compute your tax liability and pay any balance tax. After filling in all the details, you can compute your tax liability using the online calculator on the e-filing website. If there is any balance tax payable after deducting the taxes already paid or deducted at source, you should pay it online using the challan mode.
E-file your return and verify it. Once you have paid all the taxes due, you can submit your return online using your login credentials on the e-filing website. After submitting your return, you should verify it using any of the methods available such as Aadhaar OTP, net banking, etc.

What If You Miss the July 31 Deadline

If you miss the July 31 deadline for filing your ITR, you should not panic. You can still file your return by March 31 next year with some consequences. Some of them are:

You will have to pay interest and penalty as mentioned above.
You will not be able to carry forward your losses as mentioned above.
You will not be able to revise your return if you find any mistake later.
You may face scrutiny or assessment by the tax department if they find any discrepancy in your return.

Therefore, it is advisable to file your ITR before July 31 and avoid any hassle with the tax department.

How to check the status of your ITR?

After filing your ITR, you can check the status of your return on the e-filing website of the Income Tax Department. You can do this by logging in to your account and clicking on ‘View Returns/Forms’. You can also check the status of your refund, if any, by clicking on ‘My Account’ and then ‘Refund/Demand Status’.

How to rectify or revise your ITR?

What are the consequences of not filing your ITR?

If you find any mistake or omission in your ITR after filing it, you can rectify or revise it online. You can rectify your return under Section 154 of the Income Tax Act, if there is any mistake apparent from the record. You can revise your return under Section 139(5) of the Income Tax Act, if you have filed it before the due date and want to make any changes in it. You can do this by logging in to your account and clicking on ‘e-File’ and then ‘Rectification/Revised Return’.

If you fail to file your ITR within the due date, you may face the following consequences:

You will lose the benefit of carrying forward your losses, if any.
You will not be able to claim certain deductions and exemptions, if any.
You will have to pay interest and penalty for late filing, as mentioned above.
You may receive a notice from the tax department for non-filing of return and be liable for further action.
You may face difficulty in getting loans, visas, etc. as ITR is a proof of income and tax compliance.

How to e-verify your ITR?

After filing your ITR, you need to verify it using any of the methods available such as Aadhaar OTP, net banking, etc. E-verification is a process of confirming that the return filed by you is genuine and not tampered with. E-verification is mandatory for all taxpayers who file their returns online. You can do this by logging in to your account and clicking on ‘e-Verify Return’ under ‘My Account’. You can also download the acknowledgement or ITR-V form and send it to CPC Bangalore by post within 120 days of filing your return.

We hope this article helps you file your ITR before July 31 and avoid paying a huge penalty