To most people, filing income tax returns is counted among the most unpleasant tasks. Filing returns is an obligation which you are tempted to ignore, yet attend to because it is a regulatory requirement.
Filing of returns earns you the dignity of consciously contributing to the development of the nation.
If you feel that filing your returns is a needless burden, think again. Filing returns make you a responsible citizen. Here's how:
Rather than considering it as a statutory compliance alone, do it for yourself and for your country.
An individual who files returns is seen as a law-abiding citizen. Filing returns is also key to achieving your financial growth.
Filing the returns also come with many other benefits such as below:
Income Tax Return is a way to legitimize your financial standing and maintain a healthy financial transaction.
Your IT returns validate your credit worthiness before financial institutions and make it possible for you to access many financial benefits such as bank credits, etc. Your IT return is required for processing of loans by banks and other financial institutions.
When your tax payment exceeds your actual tax obligation, you are eligible for claiming a refund. Filing your returns is a prerequisite for you to be able to get these refunds.
Many countries want to know if you are financially sound before they issue you a visa and for this purpose, they will rely on your income tax returns.
Taxpayers must be punctual with filing their returns because the department only has two deadlines:
The scheduled date for filing income tax returns in India is July 31, four months after the end of the financial year.
Missing the above deadline means that you will have to file the returns with interest, on March 31 of the following year.
Once you miss both, it becomes impossible to file your returns for that year. If you do not file your return within the `due date' and file your return subsequently, you cannot have the benefit of revising the return, as the return filed beyond the `due date' is treated as `belated return'.
1. If not filed, carry forward of losses to set off against future income facility cannot be availed.
2. Levy of interest and penalty for non-filing of return.
3. Notice from the department for non-filing of return. It may be demanded anytime.
4. Non-filing of returns also involve implications beyond interest and penal interest. To illustrate: if you file the return after March 31, 2017, but before March 31, 2018, the AO (Assessing Officer) could levy a penalty of Rs 5,000 under section 271F. Even when there is no further tax payable on the income admitted, the penalty under section 271F is livable for the delay. If the return is filed after March 31, 2018, then such return would become an invalid return.
5. Section 276CC of the I-T Act prescribes that if the amount of tax exceeds Rs 25 lakh, you can be sentenced to rigorous imprisonment for between six months and seven years, as well as be fined. Some cases may also call for imprisonment of between three months and three years, with a fine. However, these penalties happen in very rare cases. In most of the cases, the taxpayer is only required to pay interest @ 1% for late deposit of income tax.