Importance of ITR Filing After 31st May Every Year

Though, Indian Income Tax Department (ITD) may introduce the Income Tax Return (ITR) forms for the previous year in the month of April itself. The usual last date of filing ITR is generally 31st July for the individuals (not auditable u/s 44AB). 

People may start filing ITRs from the month of April. However, there are certain benefits of filing ITRs after 31st May, especially for the salaried people, where employer issues Form-16 (Form-16A for professionals / others) and TRACES generated Form-26AS forms the basis for filing the ITRs.

Form-26AS is a statement of TDS deducted by the employer(s) or financial institution(s) or any deductor(s) who had paid some taxable amount to a person / entity for his / her / their services / products and had deposited in the ITD as per the prevailing IT laws. The credit of TDS in Form-26AS is reflected only after the filing of TDS returns by the employers / institutions / deductors.

These days Form-16 & Form-16A are directly generated from ITD TDS website known as "TRACES" after the filing of TDS returns by the employers / deductors. The due date of filing TDS returns for the January to March quarter is 31st of May. Therefore, one may not get his / her Form-16/16A from the employer before 31st May. So, it also means that one may not get the updated TDS entries in his / her Form-26AS before 31st May.

If one files his / her ITR before 31st May, it might be a possibility that there could be some differences in the TDS reflected on Form-26AS with the TDS depicted in the salary / payment slips. This could lead to the issue of notices u/s 143(1) issued by ITD stating the mismatch of TDS claimed in the ITR and TDS entries available in Form-26AS. This could further result in demand of tax and interest by ITD from the taxpayers. 

So, the ideal duration to early file the ITRs without last minute rush is to file between 01st June to 15th July every year.

File your ITR well in time and relax!

- The author is an ITD Certified ITR Filing Practitioner reachable on agarwal.tanmay@gmail.com.