If you are below 60 years of age and have taxable income above the Rs 2.5 Lakh exemption limit, make sure to file income tax returns. Now, if you are a first-time tax payer, filing taxes may seem a daunting task. Fortunately, the deadline to file ITR has been extended to August 31st 2019. This would be a big relief to you and several other tax payers.
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All citizens below 60 years of age and with taxable income above the minimum tax exemption limit of Rs 2.5 Lakhs a year must file income tax returns. For senior citizens between 60 to 80 years of age, the minimum tax exemption limit is Rs 3 Lakhs a year. It’s Rs 5 Lakhs a year for super-senior citizens above 80.
ITR is not mandatory for some individuals. However, there are certain benefits if you file ITR.
Claiming Tax Refund: There might be tax deducted at source or TDS on some investment in your name. If TDS has been deducted, you can file ITR and claim a refund.
Availing Loans: The income tax return gives a detailed picture on total income earned during the year. It also shows taxes paid on it. This comes in handy when availing loans or visa processing. Your eligibility and quantum of loan availed, depends on your income which is established through ITR.
See Also: Steps to File Income Tax Returns
Carry-Forward Losses: You can carry forward losses and set them off against capital gains, if you have filed ITR in the relevant assessment year. You can carry forward the losses incurred and then set them off against income you would earn in subsequent years.
Claiming Compensation in an Accident: ITR helps establish your income and this comes in useful when claiming compensation in an accident.
Be a Law Abiding Citizen: You are on the right side of the law, if you are filing ITR. You are an honest and law abiding citizen of India.
See Also: How To File Income Tax Returns?
Well, there’s the August 31st 2019 deadline and you must file ITR before this date. The returns you file after the due date is called a belated return. If you file a belated return, there’s a penalty under Section 234F of the Income Tax Act.
If you file ITR after August 31st 2019 but before December 31st 2019, there’s a penalty of Rs 5,000. If you file ITR after December 31st 2019 but before March 31st 2020, there’s a penalty of Rs 10,000. If you are a small taxpayer with income less than Rs 5 Lakhs, the maximum penalty you would incur is Rs 1,000, if ITR is filed late.
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