At the very first instance, it has been a great initiative by the government that they have made available the ITR forms on 1stDay of April itself. Although the last date of filing ITR is 31st July for individuals (Whose account are not subject to tax audit u/s 44 AB of the Income Tax Act, 1961), people have already started filing returns from the first week of April itself. But, as a professional, we would like to highlight some points regarding filing of returns before 15th May. Let us discuss the parameters we should consider before filing of our Income Tax Return.
- What is 26AS? Form 26AS is a consolidated tax statement issued under Rule 31 AB of Income Tax Rules to PAN Holders. This statement with respect to a financial year will include details of :
- Tax Deduction at Source (TDS).
- Tax Collection at Source (TCS).
- Advance Tax/Self Assessment Tax/ Regular assessment Tax etc. deposited in the bank by the Tax Payers (PAN Holders).
- What is the Purpose of Form 26AS ? The Credit available in the tax statement confirms that:
- The tax deducted/collected by the deductor/collector has been deposited to the account of the government.
- The deductor/collector has accurately filed the TDS/TCS statement giving details of the tax deducted/collected on your behalf.
- Bank has properly furnished the details of the tax deposited by you.
- Form 26AS is consolidated tax statement (Form 26AS) is used as a proof of tax deducted/collected on your behalf and the tax directly paid by you along with your income tax return.
- Due date of TDS return: The due date of filing TDS returns for the March quarter is 15th This implies that your 26AS will not be updated & you will not get Form 16/16A from the deductor before 15thMay.
Appropriate date of filing ITR by individuals: The best time to file ITRs by individuals is from 16th May to 31stWhy so?????
If you file your ITR before 15th May, it may happen that there are differences in the TDS reflected in your 26AS and the actual amount deducted and deposit on your behalf by the deductor.
From statistics of last year, it was observed that 70 – 80 % of notices u/s 143(1) issued by IT department were because of the mismatch of TDS claimed in ITR and TDS shown in 26AS. This can be avoided simply by filing ITR after 15th May.
Government is motivating people to file income tax returns at the earliest, but early filing of returns may lead to more discrepancies in TDS amount, resulting in demand of tax and interest from TAXMAN, thus increasing trouble for taxpayers.
So let us not rush and wait for the employers to file TDS returns first.