Do meet the extended deadline of August 5 for filing ITR

The income tax (I-T) department has decided to extend the deadline for filing tax returns till Saturday. If you have not filed your returns yet, make the most of this reprieve as there are many advantages of filing on time.

One important benefit is that you can rectify your mistakes, such as certain income not reported, deductions not claimed, etc., by filing a revised return. You can’t revise your return if you file it after the due date.

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Second, if you file your return late, you lose out on the benefit of being able to carry forward losses eligible for adjustment against future income. “This restriction on timely filing of return, however, is not applicable in cases where there are losses under the head 'income from house property'. Under Section 139(1), such losses can be carried forward even if return is filed after the due date," says Suresh Surana, founder, RSM Astute Consulting Group.

By filing your returns on time, you can also avoid the mandatory interest under Section 234A (for delay in filing return at the rate of one per cent per month). However, this interest charge is not applicable in cases where the entire tax liability has already been paid via tax deducted at source (TDS) or via advance tax.

By filing late, you also lose out on the benefit of a quick refund. According to the finance ministry, 90 per cent of refunds were issued within 60 days and 67 per cent within 30 days of filing the returns in 2016-17. "A prudent taxpayer should file his return within the due date to ensure quick processing and credit of refund," says Surana.

Finally, you also lose out on interest income on tax refund as it will be calculated from the date of filing. "Interest on tax refund from advance tax and TDS is calculated from April 1, and you will lose out on it if you file after the due date," says Archit Gupta, founder and chief executive officer, ClearTax.