Got your Form 16? You should file income tax returns early to enjoy benefits
May, 12th 2017
Tax experts say in case you have not yet got your Form 16 it is time to remind your employer since a few weeks of the new financial year has already elapsed.
Has your employer handed over your Form 16 for income earned and tax deducted during 2016-17 for which you need to file your tax returns this fiscal?
If you have it with you, you should quickly prepare to file your tax returns as early as possible, since you stand to gain from being one of the early birds providing information to the tax deparment.
Tax experts say in case you have not yet been handed over Form 16 it is time to remind your employer since already a few weeks of the new financial year has elapsed.
“It is time to pinch your employers to issue you the Form 16 at the earliest, so that you can file your returns early. Out of the many benefits of filing early returns is that you stand to get your tax refund early, if any,” says Sudhir Kaushik, co-founder and CFO, Taxspanner.com. The Income tax Act says that the last date for issuing Form 16 is May 31 of the assessment year.
In fact, tax filing sites such as Taxspanner.com and ClearTax.com are already witnessing early filing on their portals, larger than previous years as more people are likely to file tax returns this year on government push. “E-filing of income tax returns has begun on ClearTax. Customer queries keep coming round the year though. During tax filing customers have queries around how to report an income or how to file a return etc,” Archit Gupta, Founder & CEO, ClearTax.com told Moneycontrol.
Watch: Filing income tax returns? 10 key points to remember
In fact Kaushik says that tax filing started as soon as fiscal 2017-18 started. “We have been pleasantly surprised to see taxpayers (few) starting to file return in the first week of April itself. If the trend continues than the number of returns filing before due date might increase rapidly compared to the previous year. As soon as the awareness increases among the taxpayer on tax laws or penalty getting imposed change in taxpayer behaviour is bound to happen for good,” Kaushik said.
Under tax laws applicable from this fiscal, a late fee of Rs 5,000 will be imposed if you file after July 31, 2017 and Rs 10,000 if you file after December 31, 2017.
Kaushik said the move by the Income Tax Department to notify the ITR form on April 1 and enabling early filing the FY 2016-17 shows the revenue department’s preparedness.
Sudhir Kaushik and Archit Gupta list out 5 major benefits of early filing of tax returns:
#As mentioned earlier, you get the refund amount faster as the income tax return is processed faster (Like many other things, this also works on a ‘first come first serve basis’). You can use the funds for business and investment and earn higher returns compared to 6% p.a. paid by the by Income Tax Department.
#Since there is no rush, you can review your income and return filing properly
#In case of some mistake in the ITR filed, you get ample chances to revise the return
#If you have any taxes due at the time of submission of returns, penalty levied is less when your filing is closer to March 31 (as all taxes are due to be paid to March 31, after which penalty is levied at the time of payment of tax). The additional tax (self assessment tax) may arise due to less TDS deducted by your employer on salary income or bank on interest income.
#There will be no loss of interest since returns are being filed well within the due date. In case the return is filed within due date the interest on refund is allowed from April 1 whereas if the return is filed after due date than the interest on refund amount is paid from the date of filing.