Why is Income Tax Return Filing Important - Nine Million Dollars

It?s a known fact- ?Earn money, pay tax and relax?.
But specified persons referred in the Income tax Act, 1961 have to file income tax return also L
Compliances, compliances and the mighty compliances.

This article would briefly describe:-
A) Introduction to e filing of income tax return or filing of income tax return and its background
B) Why is income tax return filing necessary and what are the consequences that would follow when one does not file the return
C) Who is required to file income tax returns

What is Income Tax Return Filing

Return of income is nothing but a proof of income earned. Return is merely a form which specifies the details to be filled in by the applicant filing return of income.
We know that everyone deposits advance tax if that person falls in that criteria for depositing advance tax.
Self assessment Tax is also required to be deposited while filing the return when the taxable income exceeds the slab rate of income tax (for individuals) or flat rate of tax for corporate.
Return filing is both mandatory and voluntary. Law puts a mandatory requirement when it falls within its definition. However any person not having any taxable income can still file his return.
Any person who not only has his tax deducted at source in the form of TDS (Tax deducted at source) , has to file return of income also so that he is saved from the proceedings and assessments of Income escaping assessments and Best Judgement assessments and the penalty for non filing of return etc.

Why Filing of Income Tax Return Important

1. The income shown in returned income becomes your ?white? income from which anything can be purchased legally and the government has no objection to it since the source of income is in government?s records and the government has collected tax on it.

2. A mandatory concept has been introduced in the Income Tax Act, 1961 which says that any person who earns income more than what is allowed as a minimum amount on which tax is not chargeable has to file return no matter what.

3. Non filing of return of income would attract penalty of 5000 Inr.

4. Every year the Assessing officer (The officer who determines the income tax payable on the returned income filed) can issue a notice to file return of income to the desired person if the person has not filed his return and non compliances of his directions can lead to a best judgement assessment which is a high pitch assessment and the applicant ends up paying more than tax since interest and penalty is also charged on the tax.

5. A person having losses from his business, wants to carry forward his loss to the next year has to file return of income so that his loss is carried forward to the next year and adjusted from his income of the next year.

Who is required for E Filing of Income Tax Return

Till now you must have had a fair idea that one is required to file return if income exceeds more than slab rate etc.

But who all are required to file Return of Income i.e. the slab rate table is made below :-

Particulars*	Whether required to file return
Total income** (in case of a male or a hindu undivided family, and a resident in India and not more than the age of 65 years)? exceeds Rs. 200,000	Yes
Total income (in case of woman and a resident in India and not more than the age of 65 years) exceeds Rs.2,00,000	Yes
Senior citizens who earn income by any source other than business income	No

*The limits mentioned in the particulars column are as per Finance Act, 2012 which is amended every year in the Budget presented in the month of February of every year.
**Total income means the taxable income after allowing deductions.

The last date for filing income tax return is 31^st July every year after the financial year ends on 31^st March each year

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