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Income Tax Return Filing And Eligibility

IndianMoney.com Research Team | Updated On Thursday, July 26,2018, 05:52 PM

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Income Tax Return Filing And Eligibility

 

 

 

An income tax return is a declaration of your income from all sources. It also mentions the taxes due after allowing eligible tax deductions and exemptions under Chapter VIA of the Income Tax Act.

 

Who should file income tax returns?

 

There is a myth that every PAN card holder has to file income tax returns, which of course is not true. We bring you the eligibility criteria to file ITR.

Want to know more on Tax Planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.

 

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Income Tax Return Filing and Eligibility

 

According to the Income Tax Act:

  • Companies and firms have to file ITR compulsorily, irrespective of the turnover.
  • An individual has to file ITR if their gross total income exceeds the basic exemption limit.

 

Still not sure if you are eligible to file income tax returns? You are eligible, rather liable, to file income tax returns if your gross total income exceeds the basic exemption limit.

However, it is mandatory to file income tax returns even if you do not have taxable income, and you fulfill the following conditions:

 

  • You are a ‘resident’ individual citizen
  • You have financial asset outside India
  • You have a financial interest in an entity outside India

 

What is gross total income?

 

The gross total income is the income before providing for tax deductions under Chapter VIA of the Income Tax Act. Contributions to the Provident fund, payment of life insurance premiums, medical insurance premiums, investments in saving schemes like National Saving Certificates, Public Provident Fund and so on are some of the deductions under Chapter VIA.

 

Income tax slabs:

 

tax slab for individuals

 

 

tax slab for senior citizens

 

You need not file ITR if your income is not taxable, just because you are a PAN card holder.

 

SEE ALSO: Best Ways to Invest Money Under 1 Lakh

 

Modes of filing ITR:

 

ITR can be filed in two ways, paper mode and electronic mode. Electronic mode gives taxpayers three options:

1. E-filing with Digital Signature

2. E-filing without Digital Signature

3. E-filing via Electronic Verification Code (EVC)

 

The first and third options don’t require taxpayers to send the signed copy of ITR-V, an acknowledgement of returns filed electronically. However, the second option requires taxpayers to send the signed copy of ITR-V to the Bangalore CPC, within 120 days of uploading the ITR. You can either send it by ordinary post or by speed post.

 

The address of Bangalore CPC is:

CPC, Postbag No. 1,

Electronic City Post Office,

Bangalore- 560100, Karnataka.

 

Exception filing ITR electronically:

 

An assessee has to file income tax returns in the paper form through ITR 1 or ITR 4 in the following circumstances:

1. The Assessee is an individual aged 80 years or more during the previous year.

2. The assessee is an individual, Hindu Undivided Family (HUF) or a partnership firm. Their income during the previous year is less than or equal to Rs 5 Lakhs and no refund has been claimed.

 

Benefits of filing Income Tax Returns:

 

Visa processing: Visa processing requires submission of tax returns from the past years to the Embassy or the Consulate.

Loan processing: Banks ask loan applicants to furnish tax returns from the past few years to evaluate their financial situation.

Carry forward losses: Income tax laws allow taxpayers to carry forward losses to offset future income, for up to 8 consecutive years. Therefore, even though you have zero taxable income, filing income tax return is important to carry forward and adjust losses against future taxable income.

Refund: TDS is refunded only if you file income tax returns.

Avoid penalties: If you do not file returns, you may eventually receive a notice from the tax department. You may be held liable to pay a penalty of up to Rs 5,000 to 10,000 and might have to pay interest under Section 234A.

 

Be Wise, Get Rich.

 

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