Income Tax Returns: Top 7 Reasons For Filing Them On Time
The top 7 reasons why you should not be late to file your income tax returns are discussed here.
(i) To avoid penalties for late filing
Delinquent taxes attract substantial penalties. These are in addition to the interest due for you.
(ii) To receive a better service from the accountant
The accountant will be able to begin your tax preparations sooner, if you can get all your paper work done earlier. Moreover, you can find lot of opportunities to implement strategies for saving on your taxes. But if you are already late, then your accountant won’t be much help to you regarding this. Suppose there are some profits in your corporation subject to huge penalties; in such cases for late filing, the accountant might be hesitant retaining those profits.
(iii) To avoid criminal charges
In cases of not filing tax returns for many years, there may be criminal charges against you including tax evasion.
(iv) To prevent bankruptcy
In general, people who are unable to file tax returns regularly have poor business management. They are not up to date with their own accounting and bookkeeping; they just think that they know their financial position and how they’re performing. It’s the beginning of a financial calamity.
(v) To have a better relation with the tax authorities
The people who continuously file late come into the notice of the department of taxation. Disobedience might lead to audits, forcefully collecting taxes, or other legal activities. Moreover, in case you have a clean history of compliance and cooperation with the income tax department, then at times of need the tax department won’t hesitate to give extraordinary consideration to your matter and provide leniency.
(vi) To obtain finance
If you are unable to show your proper income portfolio, then it becomes difficult for you to obtain financing. The assessment notices provided by the tax department give more assurance to the banks regarding your income claims. Moreover, if you are not filing your present income tax returns, then how is it possible to know about your hidden tax liabilities? What is your own record-keeping state? Without good financial information, how are you running your business? In case you are asking for a loan, the bank might hesitate to offer it under these circumstances.
(vii) To lighten stress and worry
Most people feel guilty about filing the tax returns late. They are actually afraid of getting contacted by the tax authorities, auditing, seizing of properties, criminal prosecution, interests and penalties, etc. Whatever be the actual situation, these worries might worsen the matter. So file your income tax returns in a timely manner and save yourself some unwanted stress and worry.
Income Tax Returns: Top 7 Reasons For Filing Them On Time by Steve