All the bustle due to IT returns is soon coming to an end. All the investment proofs and the justifications for the current financial year are now in place. Most honest taxpayers can heave a sigh of relief now that the major financial hitch is out of the way. But, what about returns?
Most people do not file their Income Tax Returns.
But one should. Not filing your income tax returns attracts a 5000 rupee penalty from the Income Tax department.
There is another catch to this offer. Suppose you decide to file it later, after July of that same calendar year, your filing will be invalid. There is a stipulation according to law that states that returns should be filed as soon as you have received the income proof of your investments.
But the question is, do you need to file IT returns? Who can file IT returns?
Here are some major categories that need to file Income tax returns.
All Individuals Who Are Earning a Salary or who Own a Business Should File It Returns
It is okay for individuals who are under the minimum tax bracket to not file IT returns. But as a practice, they should file no return as it will eventually help them when their income becomes taxable.
People Who Seek Loans Should File It Returns
When a person applies for a loan, all banks ask for a duplicate copy of tax returns. Along with the salary slip the TDS certificate or Form 16 of the past two years are demanded. It is resourceful if the sanctioned loan amount is not as expected or your loan is has a chance of rejection.
Individuals Who Seek Refund on Their TDS
A few tax payers invest through fixed deposits and a TDS of 10 percent is deducted. When one files returns they can claim a refund of their filed returns.
TDS is Important if Companies have to Carry Forward Losses
Ups and downs are staple to business processes. But is returns are not filed then the capital losses cannot be shown in the coming years. Returns filed once can be displayed for8 consecutive years.
In the long term, the losses can be adjusted and this will reflect a health growth for the company which is positive when inviting new ventures for business.
Individuals Traveling Overseas Need to File Returns
It is a known practice that foreign consulates request for income tax returns for past three years along with other salary proofs. If an individual furbishes the valid income proofs then there is less hassle in getting the visa stamped.
This is particularly important if you decided to travel to countries like US, Canada, or Europe. Consulates also ask for income tax income proofs like salary slip or Form 16.
It is Handy When You Want to Buy a Higher Life Cover
If you want to buy a life cover of over 50 lakh, insurance companies demand to see your ITR returns. Although there are other factors too that come into play but showing your IT returns will help your cause.
Individuals applying for a Government tender need to show their IT returns
India is a entrepreneurial country. On these lines, Government is a very lucrative sector to start one’s business with. If an individual shows their IT returns for the past five years,
If one has to apply for a government tender, that individual needs to show the tax receipts of the previous five years.
Businesses Also Need to File Returns
Consultants, corporate organizations, top management of a company do not acquire Form 16 for the Income tax proofs. In such cases, their IT returns are vital proofs. Such companies are subject to file returns only if their annual income exceeds 2.50 lakh.
Senior Citizens between the Age Of 60-80 Can Also File Returns
Individuals who are 60 and above years of age qualify as senior citizens. It is recommended that they should file IT returns so that they can claim a refund when needed, as per tax laws. The limit for filing tax returns is, for senior citizens, above 3 lakh and for super senior citizens (60 and above) it is 5 lakh.
Resident Indians Also Need to File Tax Returns
Resident individuals who own properties outside India (not Non-Residential Indians) need to file tax returns. This is needed if the individual is drawing some sort of income from that asset, then the asset becomes taxable.
In conclusion, filing tax returns may take a little extra effort but it is worth the time because one can gain a refund if the returns are valid. That itself is a big plus when money in the hand diminishes in a jiffy. It is also a proof that you are a responsible citizen are interest in the growth of the country. Your tax returns benefit you and the country simultaneously.