Taxpayers: Early ITR Filing for FY25 - Wait or File Now?

Tax season is here, and the question on everyone's mind is: Should I file my ITR early?

Many taxpayers are rushing to file their Income Tax Returns (ITRs) for the Assessment Year 2024-25 (FY25). While filing early can avoid last-minute stress and penalties, there might be downsides to consider.

1. Tax Deducted at Source (TDS) data gets reported by payers by May 31st. Filing before this means you might miss claiming some TDS or have discrepancies with the information on your PAN. This can lead to unnecessary notices from the Income Tax Department.
2. The deadline for entities to report financial transactions (like share purchases or property deals) is also May 31st. Waiting until June ensures all relevant information is available for accurate ITR filing.
3. Employers have until June 15th to issue Form 16, detailing your salary and TDS. This is vital information for filing your ITR. Missing it can cause delays and potential scrutiny.
4. Non-Resident Indians (NRIs) should also wait until June to file. Correlating their information with the data available on the Income Tax portal in early June ensures a smooth filing process.

Who Can File Early?

• Salaried individuals with simple tax affairs (one income source, limited deductions) can benefit from early filing.
• Individuals expecting tax refunds might see faster processing, but only if their tax situation is uncomplicated.
• Taxpayers traveling or relocating soon can gain peace of mind by filing early to avoid last-minute hassles.

While filing before the July 31st deadline is important, waiting until you have all the necessary documents (especially Form 16) ensures accurate reporting and avoids potential issues with the Income Tax Department.

Utilize the Annual Information Statement (AIS) to reconcile your income details and make any necessary corrections.

So, this tax season, plan strategically and file your ITR when you have all the information in place!

Hope it will be helpful!

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