Who should file income tax returns?
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Income Tax Return Filing and Eligibility
According to the Income Tax Act:
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:
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:
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:
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.
See Also: Income tax return status
• 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.
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