For some, filing the income tax can be a daunting task. But with the Indian government making tax filing simple in recent years, the whole process has become less cumbersome for the taxpayers. However, tax delays somehow, always seem to sneak up on us. Having said that, planning to pay taxes early and before itís too late can benefit you in many ways. Letís check the five key reasons you should pay attention to your tax liability:
- Pay on Time to Pay Less Tax
This is one of the key reasons why one must plan their taxes early in order to decrease their overall tax liability. Effective tax planning can save money especially for investors who have a business or those who are planning to save for major life-changing events including marriage, the birth of their child, paying for childís higher education or even retirement.
- Early Tax Planning Can Boost Up Your Benefits
Though some tax planning strategies can be carried out in a shorter duration a majority demand longer time for the appropriate analysis and execution. For instance, investing in tax-friendly plans like ULIPs or retirement plans of different companies can take some time to process and complete, as you will take some time to research for the best plan that suits your goals and tax-saving needs. Hence investing in the same in advance can help you a lot. Moreover, ULIP tax benefits are immense, making it a suitable instrument to save tax as well as grow your wealth. If you are a businessman and have complex tax conditions, it is recommended you start early. This will offer you several benefits.
- Get Enough Time to Bring All Your Documents in Order
Although you may find the tax filing process simplified in the recent years, you cannot underestimate the time required to file tax returns. Once you start the process, you would realise the vast documentation required. These documents include interest certificates, GST certificates, the loan repayment statements, Form 26 AS and so on. All these documents are to be put in the right order. Paying tax before time can help you in fixing the issues with these documents, keeping them in the correct order or procuring them from the right sources.
- Faster Processing of Visa, Loans, And Credit Cards
The income tax returns you file is the proof of the fact that you earn a decent salary and pay taxes on time. This becomes a necessary document for availing several features including getting loans, visas and credit cards. For instance, when you are planning to apply for a home loan, it is vital to have your income proof handy. Moreover, paying your taxes within the deadlines will also strengthen your credibility and trust before different government and non-government agencies and make you a law-abiding citizen.
- Get Quicker Refunds
While filing your income tax, if you have any tax refund, you are more likely to get a refund processed at a faster pace, which also provides you with a peace of mind. Also, you get some cost benefits as well while applying it in advance. On the other hand, by delaying the process, you simply add up the interest, which hampers the refund. In other words, you end up losing the refund if you are late in filing income tax.
When it comes to taking care of tax liabilities, you need to be alert and conscious. Therefore, itís a good idea to plan your taxes before the deadline rather than waiting for the last day to file your IT return. After all, you have so many reasons to do so including the five reasons discussed above.