Every individual in India has to file income tax returns every year before the due date. But many individuals failed to do ITR Filing by the due date. Now, there are a few ways by which you can file an ITR of the past years.
This blog explains the whole procedure of filing IT returns from previous years. We will also discuss the period by which you can file ITR.
What is the procedure for filing the ITR of previous years?
As per the Finance Act 1987 amendment, it is possible to file ITR of previous years before 1 year from the end of the relevant Assessment Year. As per Finance Act 2016, one must file IT returns of the previous year by the end of the relevant assessment year.
Recently, there has been a change in the timeline for filing a belated return. According to Finance Bill 2021, one has to file IT returns of the previous years before 3 months from the end of the relevant assessment year or completion of the assessment, which is earlier.
Here’s the easy procedure to file income tax returns for past years:
- Gather all the data and information
Firstly, you must gather all the information of the year in which you want to file ITR. You have to gather W-2s, 1099s, and data for any deductions that you are qualified for. Then you have to gather tax forms for the year of ITR that you are filing currently.
- Ask for tax documents from IRS
While doing ITR Filing Online in India for the past years, you have to find documents for the previous years. IRS has all the forms that you must file to receive any tax-related information related to that particular year. You have to fill out Form 4506-T to get a transcript of your tax return information in case of non-filing ITR. This form will help you to get information about the last 10 years.
IRS will then send you the information present in the forms like 1099s, W-2s, and 1098s. However, you will not get any information related to deductions and credits in these forms. To get the list of deductions and credits, you have to find all the details on your own.
- File income tax return
After getting all the forms, you must use these tax forms for filing ITR. These documents are also available on the official site of the IRS. TurboTax is one of the best tools that help to file tax returns for past years.
It is simple to do tax return filing for individuals on TurboTax. You have to choose the year for which you are filing a return. Now, you have to enter all your tax information and TurboTax will fill out all the tax forms. Then you must take a printout and mail your tax returns for the past years.
TurboTax will ask a few questions and you have to answer them correctly.
How late can one file ITR in India?
Many individuals have this question in their minds. They want to get saved from heavy fines and penalties by filing ITR within a short time. As per IRS, you can file tax returns for the last 6 years. Even IRS helps individuals to file income tax returns for a maximum of 6 past years. You have to just fill out the required forms by providing PAN (Permanent Account Number) and TAN (Tax Collection Account Number) and other details.
IRS has different criteria for individuals who want to file tax returns for tax refunds and tax credits. You can claim tax refunds and tax credits only within 3 years of the original due date of tax returns. If you fail to file returns within 3 years, you are not eligible for tax refunds and tax credits. Individuals cannot claim lucrative tax credits or amounts exceeding the paycheck. These conditions also apply while filing ITRs for business owners.
Benefits of filing returns of the past years
TDS Return Filing of the past years has several benefits for the individuals such as:
- Saves from penalties and interest
It is necessary to file income tax returns within a deadline. It saves you from heavy penalties and fines. In the case of non-filing of ITR, you might have to pay 5% of the unpaid tax every month for up to 5 months. IRS also charges interest on overdue taxes. So, it is necessary to file ITR after Company registration.
- Pay social security taxes
Self-employed persons have to pay medicare taxes and social security taxes on ITR. Filing regular income tax returns will give you the benefits of social security retirement and disability benefits.
- Easy to obtain the loan
After filing an ITR, it is easy to get a business or mortgage loan by making PAN/TAN registration.