You might be hearing income tax all around you these days. It shall be louder even more as the due date of filing income tax returns i.e. 31st July comes nearer. Everybody is so rushed up to pay his income tax or gather necessary documents to file tax return. Discussions whether to file income tax return or not, whether it is mandatory or not must be creating lot of confusions and buzz in your mind. Don’t worry; following reasons have been outlined to show why you should compulsorily file your income tax return:
- If the income exceeds maximum amount not chargeable to tax – If Gross Total Income (GTI) of an individual is more than maximum amount not chargeable to tax then he is compulsorily required to file his income tax return. Since for F.Y. 2015-16, tax is chargeable on income of more than Rs. 2,50,000 in a particular F.Y., hence if your income is more than Rs. 2,50,000, then you have to compulsorily file your return. In case of senior citizens (60 – less than 80 years) the limit is Rs. 3,00,000 while in case of super senior citizens (80 years or above), the limit is Rs. 5,00,000.
- If income tax refund is to be claimed – If your employer has deducted TDS or you have deposited income tax in excess of total tax payable on your income, then you need to file tax return compulsorily in order to claim the refund. Earlier you file the return, faster you get the refund.
- To avoid notices – If your income is more than Rs. 2,50,000 in a F.Y. in any way but you don’t file the tax return and income tax department comes to know about your income, it may issue a notice asking you to file tax return within specified time period. To avoid such notices and attached legal compliance, file the return well before.
- If any asset is held outside India – If you hold any asset outside India or you are the signing authority in any account located outside India, then you are required to file your return compulsorily.
- To avoid penalties – If you don’t file your return until the end of the relevant Assessment Year, penalty may be imposed amounting to Rs. 5,000. But if you prove true reasons for not filing the return, penalty may be revoked.
- To improve your financial credentials – At the time of granting loans, banks etc. ask for income tax returns to identify your capability to pay- back loans. Hence filing income tax returns on a regular basis shall help you receive loans quickly and of a high worth. Also VISA agencies ask for income tax returns before issuing the VISA. Hence if you want to visit any foreign country for which VISA is required, then keep filing your tax returns on time.
- E-filing doesn’t take much time: With Tax2Win at your desk, E-filing is quite easy and simple process. So file your income tax returns on time and feel proud as responsible citizen. Further e-filing means quick verification of return, faster processing and faster refund if any.
- For carrying forward losses –If there is loss under any source of income, then return filing within due date is mandatory if losses are to be carried forward for setting-off them with next year income. If you don’t file tax returns, loss suffered in any particular year is forgone and you can’t use it as shield to reduce tax liability in next years.
- Filing tax returns means earning white money – If you duly file your returns and disclose all incomes correctly, that is sufficient to prove that you are earning white money. Any income earned but not disclosed in tax return creates a doubt in mind of Income Tax Department which in return can cause you in trouble.
- Deductions can be claimed only if return is filed – Certain expenses/ investments (viz. donations/ tuition fees/LIC premium etc.) that you incur during the year help you in saving taxes. But deductions can be claimed only if returns are filed. You can’t claim the expenses/ investments as deduction from taxable income without filing tax returns.
So start availing the service of Tax2Win as much as you can and we, in return, will make sure that income tax filing is a wonderful experience for you.