Filing Income Tax Return is mandatory for those whose income is above the taxable limit. In order to avoid any last minute difficulties, it is very important for taxpayer individuals to calculate their respective tax condition and initiate the process of income tax return.
Before you start filing your tax return it is very imperative to know who should actually file a tax return.
Any salaried individual is compliant to file an income tax return in case his/her gross taxable income surpasses the maximum amount in which the tax is not chargeable during the fixed financial year. For the residential and non-residential individual, the total income up to Rs2.5lakh is not taxable. For senior citizen individuals more than 60 years of age up to Rs3lakh of total income is not taxable and for super citizen residents above 80 years of age up to Rs5lakh of total income is not taxable. In case, the individual owns an overseas account then they may also have to file tax return irrespective of the income.
Although, tax-paying can seem to be a herculean task for most of the individuals it has a lot of advantages.
It is wise to file income tax even if the income ranges below the taxable income. Discussed below are some reasons why a person should consider filling ITR.
ITR Help to Know Your Exemption Limit- In every financial year, the limit to which income is taxable is updated by the finance minister of the country. It is important to keep an eye on whether your income is eligible for tax exemption or not.
Filing income tax return has a plethora of benefits. Irrespective of your income is below the exempted line or not it is important for you to file income tax. Moreover, it is always wise to file ITR for non-taxable income.
The income tax return forms applicable to individuals are available in 4 different categories.
ITR-1- This form is applicable to the salaried individuals, pensioners, income from one house property or other sources than the lottery with no losses to be passed onward and no foreign tax relief to be claimed.
ITR-2- Income Tax Return form 2 is applicable for those who do not have any income from business or proprietary firms.
ITR-3- This form is applicable for business owners and professionals and individuals who are involved in a projected business.
ITR-4- This form is applicable for individuals who have income assessed on a reasonable basis.
As compared to the earlier process, nowadays, the online filing of income tax return has become extremely easy and hassle-free. While filing the ITR online you are not allowed to upload any document and all the income-related documents are retained in support of claims of exemption, income disclosed, etc.
Failing to file returns could result in legal implications for the individuals, especially if they file a revised return in future. As per the Income Tax Act, non-filing of returns can lead to penalty amount of about Rs 5,000. Moreover, filing return can result in loss of interest refund. In case you have pending tax liability penal interest is applicable for the delayed filing. So keeping the repercussions in mind one should always file an income tax return irrespective of their salary is taxable or not.