WHY IS IT NOT ADVISABLE TO FILE YOUR INCOME TAX RETURN EARLY?

While a stitch in time saves nine is a useful maxim for life, it is not necessarily a good advice for filing Income Tax Return. This is because most of the data necessary for Income Tax Return Processing is not available for reconciliation at an early date.

After the introduction of the Annual Information System, Income Tax filing has been seamless to match the incomes of the taxpayer with the data available for processing. This relieves the job of filing your ITR off insecurities from vulnerabilities to mismatch. The Annual Information System is populated with data from various sources including statements of financial transactions filed by Banks, Mutual Funds and other Securities Trading Intermediaries, Sub-Registrar Offices, Companies and others and auto-population from Income Tax's TRACES. If the taxpayer files his income tax return without consideration of those data, the probabilities of receiving intimation of processing or notice of demand is higher.

The due date for filing TDS & SFT returns is May 31 and the due date for issuing Form 16/16B is June 15. The availability of data in the system for reconciliation for filing income tax return would be typically available by mid-June only. Hence it is better to file your returns after June 15 than to file early and deal with notice and demand proceedings later on.