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What is the Right Time to File Income Tax Return 2021-22?

Introduction

It is an annual ritual. You file your Income Tax Return (ITR) every year. For many, primarily the self-employed, an ITR is the primary statement of income.

Additional Read: Know more about Income Tax Basics, tax slabs and e-filing

Filing of ITR is mandatory for any individual whose total gross income exceeds the exemption limit of Rs 2,50,000 per year, or electricity consumption bill exceeds Rs 1 lakh in a year or has undertaken foreign travel for over Rs 2 lakh. Even if one does not fulfil these criteria in a particular financial year, all PAN holders should file their ITR.  

The annual ITR for FY 2021-22 (or AY 2021-22) must be filed on or before 30th September 2021.  However, it is advisable not to wait till the last day and file the returns before.  The preparation for the returns can begin well in advance and may including getting together the tax savings instruments that the taxpayer may have invested in,

Additional read: How to file tax returns and documents required

If you have failed to file the ITR of the previous financial year, i.e. FY 2019-20 (or AY 2020-21), you should file that before you file the ITR for FY 2020-21. That will ensure that there is continuity in the process of filing ITR.

Additional read: In case you have missed filing your tax return for the last year, you can still file your returns

It is quite simple to file your ITR from the comfort of your home or office if you have an internet connection. That is possible thanks to pre-approved tax preparation software provided by the Income Tax Department.  For those who cannot file online, an offline process is also available.

After submitting the tax return, one can quickly check the status online easily on the e-filing website of the Government of India. You can easily create your login account on the Income Tax website and handle the same process yourself.  After duly submitting the ITR, the Income-tax Department generates a verification form that allows you to verify the e-filing of your taxes.  For individuals, this e-verification can be done using the Aadhar number in the absence of a digital signature.  It is necessary to link your PAN and Aadhar for this purpose.

Benefits of filing ITR 2021

For many individual taxpayers, an ITR serves as the only authentic Proof of Income and helps to convey a solid financial position. That is useful while availing credit of any nature, e.g. loans, credit cards, mortgages etc., from banks and financial institutions. The salaried class have the advantage of providing Form 16 issued by their employers as proof of income, which is not available to small business people or self-employed professionals. 

Filing an ITR early has a specific advantage, especially if there is a refund. The income tax department usually processes it within 30 to 45 days. Any delay beyond the due date or non-filing may attract a penalty and can be a deterrent factor while availing of a loan or during a visa approval in future.

Disclaimer

ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470.  Please note, filing of tax related services are not Exchange traded products and I-Sec is acting as a distributor to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

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