Should you file Income Tax Return now or wait till Mid June?

Income tax department urges the people to file their income tax returns early for ease and convenience. Till 12^th May, 2024 11.46 lakh assesses have already filed their income tax returns for AY 2024-25 out of which 6.44 lakh returns have been processed by the department. However, it is advisable to wait till 15^th June to file Income tax returns because of the following reasons.

• 31^st May being the due date to file TDS return: The due date to file TDS return for the quarter January to March is 31^st May 2024. Many companies usually file their TDS return near around 31^st May 2024 and the TDS is reflected after few days therefrom. Until the deductor submits TDS return, the TDS details are not be visible in the taxpayer’s Form 26AS. Also, they are duty bound to issue Form16/16A by 15^th June 2024. Hence waiting for 15^th June is important for those assesses whose TDS has been deducted on their incomes such as salaries, interest, dividend, professional receipts, rental income etc.

• SFT Reporting: Many transactions need to be reported to Income tax department by various institutions like financial institution, mutual fund, registrars. Such transactions include credit card transactions, bond or share transactions, mutual fund transactions, purchase and sale of properties and cash deposits exceeding Rs 10,00,000. These transactions are reported through Statement of Financial Transactions (SFT) which concludes on 31^st
• 26AS and Annual Information Statement: 26AS and AIS play an important role in filing income tax return. All the information appearing in 26AS and AIS must be taken into consideration while filing returns. These are usually updated after TDS return and SFT fling, the due date of which is 31^st The assesses must reconcile these transactions before filing their income tax returns, else notice from department is inevitable.

Who can file Income tax returns early:

Individuals with straightforward tax calculation with no tax deduction involved may consider filing early in May. Taxpayers traveling or relocating close to the filing deadline can benefit from early filing to avoid last-minute rush and penalty. Also NRIs who do not have any other source of income in India except capital gains on sale of property can file their income tax returns early.

Conclusion: Filing taxes after 15^th June certainly allows individuals more time to gather all necessary documents and assess their financial situation thoroughly. Waiting until mid-June can indeed help ensure that all income sources and deductions are accounted for accurately, potentially reducing the risk of errors and avoiding penalties.