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File ITR before 31st July 2022 to avoid late fees of 1000/5000

Kindly Attention: ITR Due Date may not be extended, File ITR before 31st July 2022 to avoid late fees of INR 1000/5000. For better understanding we have taken two character and through their conversation we will discuss the same. Two characters are Ram and Shyam.

Shyam (Fictional Character): Ram, What is the buzz going around regarding Income tax return?

Ram (Fictional Character): Shyam, The Due Dates for all Individuals, HUF’s and Firms who are not required to audit their books of accounts, company assessee, LLP’s assessee, etc. are need to file their Income Tax Return before 31st July, 2022. So this is the last day to file ITR.

Shyam (Fictional Character): Ram, what are the things which need to be kept in mind for filing Income tax return before 31st July, 2022?

Ram (Fictional Character): Shyam, while filing Income Tax Return the taxpayer have to keep some documents handy like:

  • Form 26AS
  • AIS (Annual Information Statement)
  • Form 16 (in case of salaried employees)
  • Bank account Statements
  • Documents for claiming deduction u/s 80 (e.g. receipt of insurance premium paid, Tuition fees, Donation, housing loan repayment etc.)
  • Any other document as may be required

While filing income tax return taxpayer should ensure all the incomes are properly disclosed in income tax return and information available in above documents are properly matched. In case of business entity taxpayer should make sure to reconcile GST as per books and GST portal and should also verify the balances of debtors & creditors and valuation of closing stock. The taxpayer should analyse and choose the tax regime which is beneficial according to the applicable conditions.

Taxpayer should cross checked that information provided in Annual Information Statement  regarding share market been reconciled with the capital gain statement & profit and loss account provided by the broker. Sometimes sales & purchase rate shown in Annual Information Statement  at a closing rate of that day and may not be the same with the statement provided by the broker, thus the value of the sale of Annual Information Statement  may not match. The taxpayer should also ensure that if they are maintaining books of accounts the holding of their shares, mutual funds as on 31st March 22 should match with the statement.

Shyam (Fictional Character): Ram, what are the consequences of not filing Income Tax Return before 31st July 2022?

Ram (Fictional Character): Shyam, the consequences are-

  • Late fees u/s 234F of Rs.5, 000 will be levied if total income is above INR 5, 00,000 and INR 1,000 if total income is upto INR 5, 00,000. 
  • Losses under the head Income from Business or Profession or Income from Capital gains, cannot be carry forward to next year. 
  • Interest will be payable at the rate of 1% per month on the tax payable.

Shyam (Fictional Character): Ram, what should one learn from this?

Ram (Fictional Character): Shyam, the assessee should avoid last minute rush and file the income tax return as early as possible. As the due date has come we may face some heavy traffic in the income tax website to avoid the late fees and interest. This year the last date of income tax falls on Sunday which is a bank holiday, so there may be traffic in banking channels, thus the assessee should ensure that they file their return without waiting for the last hour.