Benefits of Filing Income Tax Return Early

Filing your income tax returns early has many benefits for taxpayers. It helps you follow the tax rules and lets you plan your money better. When you file early, you can get your tax refunds faster, avoid penalties, and feel more relaxed about your finances. 

Is It Good to File Income Tax(ITR) Returns Early?

Yes, it is good to file tax returns early as it has various benefits which have been discussed in this article. Read along to know the benefits of filing ITR early.

Benefits of Filing Income Tax Returns Early

• Identify tax-saving opportunities: Filing your return early will give you a chance for a more comprehensive review of your tax position, which might expose omitted exemptions or credits that could decrease your overall tax burden.
• Faster refunds: It is done on a first-come-first-served basis by the IT department, so the sooner it is filed, the quicker they will process the return and give out any refunds due.
• Avoid penalties and interest: Late filing can result in penalties and interest charges. However, as long as you file the revised return within the due date, there is no penalty for correcting your return. 
• Accuracy advantage: The rush to meet deadlines can lead to tax-return mistakes. Early filing gives you enough time to collect documents, check figures, and reduce errors which may delay your refund or invoke penalties.
• Loan applications: A filed tax return serves as proof of income, which can be crucial when applying for mortgages or auto loans. In many banks, having a filed ITR is a must for the approval and sanction of a loan.
• Visa processing: Certain countries may require proof of filing tax returns for individuals applying for visas. Early filing avoids delays in the visa application process due to missing tax documents.

How Early Can You File Income Tax Return

Starting from April 1st, taxpayers can file their Income Tax Returns for the Financial Year 2023-24 (Assessment Year 2024-25). This marks the first time in recent years that taxpayers can file their ITRs from the beginning of the financial year. This step is taken to improve compliance ease and provide seamless services to taxpayers. The available forms for filing include ITR-1, ITR-2, ITR-4, and ITR-6.

Related ITR Articles:
1. How to file ITR on ClearTax
2. Which ITR should I file?
3. How To File ITR
4. Last date to file ITR