Filing ITR For FY23-24: Here's Why Salaried Individuals Should Wait Until June 15

The income tax return (ITR) filing process for the financial year 2023-24 (assessment year 2024-25) has begun on the e-filing income tax portal. The commonly used ITR forms have been available since April 1, making it easier for taxpayers to start filling their ITR early. However, if you are a salaried individual, it’s advisable to wait until June 15 before filing your ITR.

Why Wait Until June 15?

Salaried individuals should delay filing their ITR until June 15 for a few important reasons. According to an ET, Annual Information Statements (AIS) and Form 26AS are usually fully updated by May 31. Additionally, salaried individuals receive their TDS certificates within 15 days of this date. Filing ITR before these documents are fully updated can lead to incomplete information, potentially resulting in underreporting income and facing penalties.

Importance of Accurate Information

AIS and Form 26AS start showing some data before May 31, but the complete information for the last quarter of the previous financial year is typically updated by then. Filing an ITR based on incomplete data can lead to underreporting income, which might attract penalties. Therefore, waiting until June 15 ensures that you have all the necessary information, including TDS certificates, for accurate ITR filling for FY23-24.

Role of Financial Institutions and Form 26AS

Banks and financial institutions must submit a Statement of Financial Transactions (SFT) to the income tax department annually. These statements include income from shares, mutual funds, dividends, and interest from various accounts. Once these institutions file their SFTs, the AIS, accessible to taxpayers, gets updated. This comprehensive record includes details like total salary income, tax deducted, and interest earned, which are crucial for accurate ITR filling for FY23-24.

TDS Certificates and Form 16

The tax deducted at source (TDS) is filed quarterly by tax deductors, such as companies or banks, with the last quarter's TDS return due by May 31. The deducted tax is then reflected in Form 26AS, which serves as a tax passbook. TDS certificates, such as Form 16 and Form 16A, are issued within 15 days of filing the TDS return, meaning you should receive these by June 15. These certificates are vital for matching the tax deducted with your records in AIS and Form 26AS.?Here's How You Can Download Form 16, 16A and 27D Online

Avoiding Penalties for Incorrect ITR

Filing an ITR with incomplete information can lead to receiving an income tax notice for underreporting income. Misreporting or underreporting income can result in penalties ranging from 50% to 200% of the tax payable on the underreported amount under Section 270A of the Income Tax Act, 1961. Therefore, ensuring your income details are accurate before filling out the ITR for FY23-24 is crucial.

Also Read:?How To File Your Income Tax Returns Online? A Step-By-Step Guide

Filing Correct Income Information

Form 16 simplifies the ITR filing process for salaried individuals. It includes two parts: Part A, shows taxes deducted, and Part B, shows total salary income and deductions. Ensuring that the information in Form 16 matches AIS and Form 26AS helps avoid discrepancies and potential penalties. If you find that your ITR was filed with incorrect information, you can file a revised ITR by December 31, 2024.

Exceptions to Waiting Until June 15

If no TDS was deducted from your income, no TCS was collected, and you have complete information about your total income from various sources, you may proceed with ITR filing without waiting until June 15. However, for most salaried individuals, waiting ensures accuracy and compliance with ITR rules for FY23-24.

By following these guidelines, salaried individuals can ensure a smooth and accurate ITR filling process for FY23-24, avoiding any penalties and ensuring compliance with tax regulations.

FAQs:

1. When does the ITR filing process for FY23-24 begin?

The ITR filing process for the financial year 2023-24 (assessment year 2024-25) begins on April 1, when the commonly used ITR forms become available on the e-filing income tax portal.

2. Why should salaried individuals wait until June 15 to file their ITR?

Salaried individuals should wait until June 15 to file their ITR because the Annual Information Statements (AIS) and Form 26AS are usually fully updated by May 31, and TDS certificates are typically issued by June 15. Filing before these updates can result in incomplete information and potential penalties for underreporting income.

3. What is Form 26AS and why is it important?

Form 26AS is a tax passbook that shows the total taxes deducted and collected against a PAN. It is crucial for ensuring that all TDS details match with the AIS to avoid discrepancies and penalties.

4. What is AIS and how does it help in ITR filing?

The Annual Information Statement (AIS) provides a comprehensive record of an individual's financial transactions, including income details, tax deducted, and interest earned. It ensures that taxpayers have all the necessary information for accurate ITR filing.

5. What are the penalties for filing incorrect income in the ITR?

Filing incorrect income in the ITR can lead to penalties ranging from 50% to 200% of the tax payable on the underreported amount, under Section 270A of the Income Tax Act, 1961.

6. Can I file a revised ITR if I discover errors in my original filing?

Yes, if you discover errors in your original ITR filing, you can file a revised ITR by December 31, 2024, to correct any inaccuracies.

7. What is Form 16 and how does it aid in ITR filing?

Form 16 is a TDS certificate issued by the employer, showing the total salary income and taxes deducted. It simplifies the ITR filing process by providing detailed information necessary for accurate tax reporting.

8. What should I do if there are discrepancies between Form 16 and AIS?

If there are discrepancies between Form 16 and AIS, you should verify the details and get the discrepancies corrected to ensure accurate ITR filing and avoid penalties.

9. Can I file my ITR before June 15 if there is no TDS or TCS on my income?

Yes, if no TDS was deducted from your income and no TCS was collected, and you have complete information about your total income, you can file your ITR before June 15.

10. What information is included in the Statement of Financial Transactions (SFT)?

The SFT includes details of various financial transactions like income from shares, mutual funds, dividends, interest from savings accounts, fixed deposits, and credit card bill payments, which are reported to the income tax department.

Disclaimer:

This article is for informational purposes only and does not constitute financial or legal advice. Individual circumstances may vary, and it is recommended to consult a tax professional or financial advisor to ensure compliance with the latest ITR rules and regulations for FY23-24. The information provided is based on current tax laws and guidelines, which are subject to change.

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