9 lakh ITRs already filled, What is Right Time to File ITR

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In Year 2024 ITR 1,2,4 and 6 made available by Income Tax Department on 1st April 2024 to give early opportunity to file Income Tax Returns. ITR 3, 5, 7 will be available soon.

Last Date to file Original Income Tax Return for F.Y. 2023-24 (A.Y. 2024-25) is 31 July 2024 for Non Audit Cases and 31 October 2024 for Audit cases.

As per Income Tax Portal By 5th May 2024, Over 8.28 lakh returns were filed, with over 7.51 lakh verified and 5.10 lakh processed.

With the tax filing season in full swing, taxpayers are faced with the perennial question: When is the best time to file their income tax return (ITR)? While some prefer to get ahead and file early, others opt for a more cautious approach, waiting until later in the season.

This article explores the pros and cons of filing in May, June, or July, helping taxpayers make an informed decision about the optimal timing for their tax filing.

Filing in May:

Ideal for:

Salaried individuals with straightforward tax affairs and in case Tax is payable then you may get benefit of less Interest on Tax liability if you were liable to pay advance tax.
Individuals expecting tax refunds if TDS is reflected in 26AS and AIS.
Taxpayers traveling or relocating close to the deadline.

Advantages:
- Early filing allows for revisions without penalties.
- Save Interest on Tax Liability
- Expedited processing for potential refunds.
Disadvantages:
- Potential errors due to incomplete information.
- TDS discrepancies if not reconciled with Form 26AS and AIS.

Reason of Disadvantage: There are 2 important forms for Income tax Return filing Form 26AS and AIS having details about Income, TDS, TCS, SFT Transactions, Dividend etc. and these forms will be completed only when the responsible persons file the TDS, TCS, SFT statements, These forms will be updated only after 31 May 2024 and in case you file ITR without these forms got updated then you may get mismatch notice.

Filing in June:

Ideal for:

Taxpayers seeking accuracy and completeness in their filings.
Non-resident Indians (NRIs) with complex financial affairs.

Advantages:
- Reconcile figures with TDS data reported on PAN.
- Wait for Form 26AS and AIS for accurate reporting.

Filing in July:

Ideal for:

Taxpayers seeking accuracy and completeness in their filings.
Non-resident Indians (NRIs) with complex financial affairs.

Advantages:
- Maximized time for compiling and verifying information.
- Avoids the rush of last-minute filers.
Disadvantages:
- Risk of missing the deadline and incurring More Interest on Tax payable.

Form 16 & 16A Important for ITR filing

Among the most critical documents are Form 16 and Form 16A, which provide detailed information about income earned and taxes deducted at source (TDS).

Understanding Form 16:

Issued by employers to salaried employees.
Provides a comprehensive summary of salary income, allowances, deductions, and TDS deductions.
Must be obtained from employers by June 15 of the assessment year.

Importance of Form 16:

Crucial document for accurate reporting of salary income and TDS deductions in the ITR.
Enables taxpayers to reconcile their income and taxes withheld before filing.
Helps minimize errors and discrepancies in the tax filing process.

Obtaining Form 16A:

Issued by entities other than employers, such as banks, to individuals for various payments.
Provides details of income sources other than salary, such as interest income, commission, or rental income.
Necessary for reporting additional income sources in the ITR.

Preparing for Tax Filing:

Ensure timely receipt of Form 16 from your employer by June 15.
Request Form 16A from relevant entities for any additional income sources.
Review both forms carefully to verify the accuracy of income and TDS details.

Benefits of Early Preparation:

Early acquisition of Form 16 and Form 16A allows ample time for reviewing and reconciling information.
Reduces the likelihood of errors and discrepancies in the ITR.
Facilitates a smoother and more efficient tax filing process.