Why Should We File Income Tax Return On Time?

As per Section 139(1) of Income Tax Act 1961, if the income of any person exceed maximum amount not chargeable to tax without giving the effect of section 10A/ 10B or Chapter VI-A. Then he or she is required to file his/her income tax return according to the time limit specified 

Last dates for filing income tax return for income tax assessment year 2013-14 are as follows:

1. 31st July 2013: for the person whose account need no to be audited.
2. 30th Sept 2013: for the person, firm or company whose account to be audited.

Now the big question is that if we not file return on due date that what is the loss?

Some are as follows:

A. As per Section 139(5) of income tax act 1956, if you discover any omission, mistake, Wrong statement or missing information in the return or any other reason, then you can revise your income tax return. But the revision is only possible if you have filed the return according to section 139 (1).

B. As per the Section 234A of income tax act, if a person have not paid his tax liability on or before due date mention u/s 139(1), the person need to paid off it all liability with interest. The rate of interest on the same is 1% per month.

1. But as the interest is calculated on tax amount and tax amount is calculated after deduction of TDS, TCS and Advance tax. So if  tax is due on you then there is no interest also.

2. In simple words if you already paid you tax dues through TDS or TCS or Advance tax, then you need not to worry, no interest will be applicable.

C. Set off and carry forward of losses: if you current year income contain loses from business or profession or from capital gain or House property then you can carry forward the same amount of loss to next assessment year and set off the amount against that year income. But this benefit is available only if you have filed you income tax return according to the section 139(1).

D. To avoid any penalty by the Income Tax Department, you must file your Income Tax Return before the end of the relevant assessment year that is 31st March 2014.

Possibility of Penalty and Prosecution: If you do not file your Income Tax Return by 31st March 2014, the Income Tax Department may impose a penalty of Rs. 5000, even though the tax payable by you may be Zero.

E. Other reasons for filing the returns of income within time If a refund is due after adjustment of prepaid taxes, it is necessary to file the Income Tax Return to get the refund from the Income Tax Department.

Bank Loans: Further, the return is a declaration of your income and it will be extremely helpful when you are applying for a loan from bank. Before granting the loan, banks want to know your financial capacity and your income details as shown by you in income tax returns.

Visas of foreign countries: Many countries want to know if you are financially sound before they issue you a visa and for this purpose they will rely on your income tax returns.

So submit you return on time and save money.

Subscribe to Studycafe by Email

Read more »

E-Filing of IT Return mandatory for Individuals having Total Income of more than Rs.5 Lakhs.

The Central Board of Direct Taxes (CBDT) is Spreading e-tax net through Notification dated 34/2013 dated 01.05.2013. E-filing of I-T returns is now mandatory for individuals, including salaried taxpayers, earning more than Rs 5 lakh taxable income during the financial year ended March 31, 2013. 

Earlier the same was mandatory for thae Individuals having salaried Income more than 10 Lakhs. CBDT’s earlier notification that salaried Individual having Income less than 5 Lakhs need not to file Income tax returns continues to be in force. Therefore salaried Individual earning less than Rs 5 lakh and whose saving bank interest income is less than Rs 10,000 in a year will need not to file Income Tax returns. However, if an employee has switched jobs during the financial year, then this leeway of tax filing exemption is not available. Since there is a condition to get the exemption that the employer has discharged the entire tax liability through deduction of tax at source and deposited it with the government & there is very chance that either of the employers will not discharge entire tax liability due to lower tax calculations at their end.
After the above said new notification comes into force income tax return filing is mandatory for three types of individuals having salaried income:

i) Individuals having salaried income over 5 lacs

ii) Individuals having salaried income over 5 lacs & switch over their job during the financial year.

iii) Individuals having salaried income less than 5 lacs & switch over their job during the financial year.

iv) Employees having income less than over 5 lacs but having other incomes and/or having interest income over 10000.

For the first two categories of employees e-return filing is mandatory. For the other category of individuals e filing is mandatory if their total income exceeds Rs. 5 lacs. Simultaneously e-filing of I-T returns also helps speed up the process of granting refunds to taxpayers – the processing is carried out at the CPC-Bangalore. After making the income tax return mandatory for the individuals having total income over 10 lacs, IT department needs to extend the time limit for return filing of individuals from 31st July to 31st august (for 1 Month) due to non availability of access of website of the tax department which enables e-filing of returns. As per IT department there is about 18 lacs of individuals who file return between 5 lakhs to 10 lakhs which gather more traffic in the e-return filing website in this AY. It’s a good step by the IT department to gear up the Income tax return processing but a question that how the department’s website handles such huge traffic especially during the peak return filing
season. Through the same notification, the CBDT has also introduced e-filing of tax audit reports, transfer pricing (TP) reports and Minimum Alternate Tax (MAT) certificates. Earlier, while e-filing of I-T returns was mandatory for India Inc, these reports had to be physically filed at
the local tax offices.

Subscribe to Studycafe by Email

Read more »