Filing Of ITR
Filing tax returns is an annual activity seen as a moral and social duty of every responsible citizen of the country. It is the basis for the government to determine the amount and means of expenditure of the citizens and provides a platform for the assesse to claim refund, among other forms of relief from time to time.
The government mandates that individuals who earn a specified amount of annual income must file a tax return within a pre-determined due date. The tax as calculated must be paid by the individual. Failure to pay tax will invite penalties from the Income Tax Department.
Whether your plans are in the immediate future or not, if you are planning on traveling abroad, you will realize that visa processing requires that you submit your tax returns for the past few years, to the relevant country’s embassy/consulate, including the UK, Europe, Canada and USA.
Regardless of the type of loan, most banks will ask you to furnish your tax returns for the past few years to understand your financial situation. Having your tax returns on hand can speed up your loan processing time.
- As per income tax laws you can carry forward losses (capital loss, business loss, etc.) to offset any future income, for up to eight years consecutively. So, even if you have fall into the taxable income bracket you can carry forward and adjust your losses against your future taxable income by filing your tax return in time.
- When employed, your employer will deduct TDS on your income. However, if you have made investments that are tax deductibles, it reduces your taxable income. So, the TDS deducted can be refunded, but only If you file your taxes. The same holds true for TDS deducted by any other sources.
- While, you may not immediately receive a notice from the tax department for failing to file taxes, you may eventually receive one. If it turns out you failed to file your returns though you were required to file it, then you might be penalized up to Rs 5,000-10,000 and might face interest payment under Section 234A.