E-submitting of Income Tax Return 2019-20: People earn money at some point in the complete financial year and spend it per their requirements. However, sometimes, they overlook holding apart the tax quantity and use it on different expenses. In one of these situations, taxpayers may find it hard to well-timed pay the tax while filing their Income Tax Returns. So, if you don’t have enough finances to pay for the tuition, here are a few options you won’t forget. But earlier than that, let’s recognize…
What happens if you fail to pay earnings tax on time?
According to the Income Tax guidelines, if you fail to file the ITR by the prescribed deadline (31 July of the respective evaluation year), you may be vulnerable to paying the penalty as per the relevant fee. For taxpayers having an income much less than Rs 5 lakh, the maximum penalty is as much as Rs 1,000. Suppose your earnings are more than Rs five lakh. In that case, you will be accountable for a sentence of as much as Rs 5,000 if the return is filed after the due date, however, earlier than 31 December of the AY, and up to Rs 10,000 if the return is filed after 31 December of the applicable AY.
It’s likely a situation where taxpayers fall quickly off tax cash.
There might be many motives because a taxpayer might fall short of the tax money while submitting the returns. Some taxpayers mistakenly suppose that the complete earnings in an economic year are their personal and forget about the tax legal responsibility that can be carried out on such profits. Later, they fall short of the tax cash.
Even if they’ve earmarked the tax money, they sometimes emerge as spending it on different matters, especially while tackling a monetary emergency. Another not unusual situation is that taxpayers make a calculation mistake while assessing their tax legal responsibility and preparing; hence – it is simplest to get a rude shock while submitting the returns after realizing that their earmarked funds are inadequate to repay their tax dues.
So, what is the way to set up finances to pay taxes?
Before that, ensure absolute clarity for your general tax liability for the applicable assessment. Don’t forget to consider income from other resources (like income/loss from house belongings, presumptive business or career, dividend earnings exceeding Rs. 10 lakh, agricultural income, etc.), capital profits, etc. Consult a chartered accountant if you get stuck. Once you realize how much you owe in taxes, the quality answer is to save that lot in your financial institution account or a secure brief-time-period investment instrument like a fixed deposit or routine deposit. But in case you’re unable to set up for the tax money, here are some options that you could do not forget:
1. You can apply for a loan in opposition to your investments like shares, Public Provident Fund, FDs, existence insurance coverage, etc. Adding collateral will convey down the hobby element of the loan, especially when compared to unsecured loans like private loans. You can also raise finances quickly by taking a loan towards your gold.
2. If you don’t have any safety to pledge, you may consider taking a personal mortgage (provided you have a decent credit score) or a pre-authorized mortgage against your credit score card (furnished your card has that option). However, both loan facilities have better hobby prices than a secured loan. So, make sure you cross for a mortgage handiest if you may come up with the money to repay all the installments in time without jeopardizing other essential financial commitments to avoid debt accumulation and an impacted credit rating.
3. You also cannot forget to liquidate investments like FDs and liquid finances to arrange for the tax money.
4. If you’re watching for the maturity of an investment or money from any other supply in a few weeks, you may want to pay off the taxes with your credit card before the closing date and pay off the cardboard bill with the help of the extra money in the hobby-free duration.
5. Lastly, you can search for assistance from friends or family to raise funds or dig into your emergency fund. However, repay them in time or refill your emergency fund as soon as feasible.
Make brief, informed choices to ensure you file your returns on time.
There is the cost of missing out on the due date for filing the ITR, and there may be the value of borrowing funds to pay the tax while you don’t have adequate money in hand. In many instances, the price of missing the ITR due date is better than the value of borrowing the fund to pay for the taxes. For example, if you want to hold ahead losses, you can leave it out if ITR isn’t filed on time.
So, intently evaluate your budget and make quick, informed decisions if you want to so you don’t miss the tax filing due date. Remember, filling out your returns is not only a formality. Your ITRs are very important when you practice for a loan or need to shop for a life insurance policy with excessive confidence – even to use isa to certain international locations. Paying your taxes on time will ensure no notices or inquiries from the I-T Department. As such, the financial field in a well-timed fee of your taxes will extend to your financial future and minimize the possibility of any unpleasant surprises later.
