01 Oct
Does your income fall below the threshold You may still need to file your income tax return
Does your income fall below the threshold?
You may still need to file your income tax return
Filing an ITR is required to claim any tax refund
deducted at the source
The Central Board of Direct Taxes (CBDT) has extended the deadline for
filing income tax returns (ITRs) for the assessment year 2021-22 till the end
of December. Those who do not have to file an ITR will have more time to go
into the quality of filing returns. Here are some benefits of filing an ITR
even if you have a below taxable income.
Who
files the tax return?
All those under the age of 60 will have to file tax/return only if their
taxable income is more than Rs 2.50 lakh, says Santosh P, Director, Alliance
Tax Experts. He further said that those above 60 years of age but below 80
years can be exempted from filing returns as long as their income is less than
Rs 3 lakh.
Further, senior citizens who have already crossed 80 years of age are
exempted from paying tax if their income is less than Rs 5 lakh.
In the Union Budget 2021, the government had made provision for exemption
of senior citizens aged 75 years and above from filing income tax returns for
this year if they have pension income and interest from a fixed deposit in the
same bank.
Santosh P, Director of Alliance Tax Experts, says that where a person's
gross income (GTI) is between Rs 2.5 lakh and Rs 5 lakh, he can ask for tax
exemption. “However, if the total income exceeds the basic exemption limit,
they are required to file an income tax return for that year,” he says.
Further, the law provides for the mandatory filing in certain
circumstances (such as overseas travel and spending on electricity bills,
foreign income or assets, etc.) even if the total income is less than the basic
discount limit.
Individuals with incomes below the basic exemption limit should consider
this situation before deciding not to file an ITR, Santosh P further says.
Santosh P also adds that it will be mandatory for individuals who have
deposited more than Rs 1 crore in one or more current bank accounts during the
year to file a return.
Benefits of filing returns even when not required
Tax return filers can claim a refund of tax paid as TDS (Tax Deduction at
Source). Conversely, if no one has filed a return, TDS cannot claim a refund.
If you want to claim a deduction for some expenses or investments, it is
also necessary to pay a return, but you missed sharing it with your employer
and faced higher TDS as a result.
Also, filing an ITR must claim a refund of the tax deducted at source on
the payments received by an individual, who may not otherwise be liable for
taxation.
If your income is higher than the basic exemption limit but less than Rs
5 lakh, you can claim a rebate of up to Rs 12,500 under Section 87A.
Santosh P says, “Where a person's GTI is between Rs 2.5 lakh to Rs 5
lakh, he can ask for tax exemption.
Santosh P further says, "Although it is not mandatory for some
individuals to file an ITR, there may be some benefits if an ITR is
filed."
It is necessary to file a return for further loss and for future income.
They say that the income tax rules allow them to carry forward the losses away
from the capital gains that are filed only in the relevant assessment year ITR.
ITR is also a common condition when applying for loans and credit cards.
International visa applications may require a few years of ITR.
Keep documents
According to Santosh P, documentary evidence relating to the source of
income and deduction or rebate claimed in the ITR should be preserved. Strong
documents such as proof of investment/expenditure for claims under section 80C,
donation receipts for section 80G, rent allowance etc., rent receipts etc.
should be maintained.
According to the Finance Act, 2021, tax authorities can re-open
assessments for up to three years in generic cases (six years for the earlier
period) and for more than 10 years in certain cases. Therefore, based on the
nature of income and assets, taxpayers should handle documents for at least six
years
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