Credit score to avoiding penalty: Why you must file your ITR before July 31

The deadline for submitting Income Tax returns (ITR) for FY24 is July 31 but taxpayers should not wait until the last minute. Filing ITR on time offers benefits that will help them in the long run.
 

Why you should file ITR
 

Filing ITR is crucial for legal compliance, avoiding penalties, and facilitating loan and visa applications. It helps in claiming refunds, provides proof of income, and ensures transparency.
 

Filing ITR is a legal requirement. If your total income surpasses the basic exemption limit set by the Income Tax Department, you must file a return.
 

Why you should file your returns before July 31

 

Filing your ITR before the deadline helps you avoid penalties and interest charges. If you miss the July 31 deadline, you may be subject to a late fee.
 

Filing early allows you ample time to collect all required documents and information, ensuring your tax return is accurate.
 

Timely filing is essential for claiming refunds. If you have paid more tax than your actual liability, you are entitled to a refund from the Income Tax Department.
 

After filing the tax you also need to verify it. Under tax laws, you must verify your ITR within 30 days of filing. Filing early gives you sufficient time to verify your return and correct any errors if necessary.
 

File your income tax return before July 31 to maintain a good credit score. Banks and financial institutions often consider ITR as a proof of your financial stability when you apply for loans or credit cards. ITR filed on time demonstrates your financial discipline and can improve your chances of securing credit at favourable terms.
 

By filing your ITR before the deadline, you can avoid the last-minute rush and potential errors. This not only ensures compliance with tax laws but also allows you to plan your finances more effectively for the upcoming year.
 

Documents required to file Income Tax return:

 

PAN Card

Aadhaar Card

Form-16 from your employer

Form 16A from banks and other TDS certificates

Annual Information Statement (AIS)

Form 26AS
Tax saving investment and expenditure proofs

Bank account details

Proof of other income from different sources