Tax

Should I file income tax returns? This is a common question among young Indians. There is not much awareness among the Indian taxpayers, especially the young ones, about when they are required to e-file income tax returns.

 

But e-filing income tax returns is important. You should e-file income tax returns for AY2016-17 (FY2015-16) before the deadline of 31 July 2016 for any of the following five reasons:

 

Income above Rs 2.5 lakh

Anyone who earns more than Rs 2.5 lakh in a financial year is mandated to file their income tax returns. This Rs 2.5 lakh limit is before you claim any tax-saving deductions. You have to file your tax returns even if you don’t have taxable income after you have claimed these tax-saving deductions. As long as your gross annual income is more than Rs 2.5 lakh, you have to file your tax returns.

 

Get a tax refund

Your employer has deducted tax at source(TDS) on salary earned by you. This TDS can often be in excess and you can get a refund on it. But you will not receive this refund if you don’t e-file your income tax refunds. The Income Tax Department will not be able to process a tax refund without your Income tax returns.

 

Avoid non-filing penalties

If you’re lawfully required to e-file your income tax returns but you don’t do so, the Income Tax Department can levy penalties on you. You should e-file tax returns within the set deadlines. If you fail to do so, the penalty can be as much as Rs 5,000. This is at the discretion of the assessing offer, but you should make sure that you e-file on time.

 

Apply for a visa or a loan

When you want to apply for a visa or a loan, you will be required to furnish your income tax returns. The tax returns are proof of your income and enables the institution or organisation granting the loan to have the required information about you. Hence, your tax returns should be filed for a visa or loan to be approved.

 

Own foreign assets

The Income Tax Department has mandated that any Indian resident who owns or is beneficiary of assets outside India should file income tax returns. These foreign assets can be a house or a financial interest in an entity outside India. The same applies for an Indian resident who holds an account in a foreign bank.

 

To begin filing your returns for free now log onto Cleartax.com. Just upload your form 16, verify details and you are done.

 

 

Disclaimer by SEBI:

ICICI Prudential Life Insurance Company Limited is proposing, subject to receipt of requisite approvals, market conditions and other considerations, to make an initial public offer of its equity shares and has filed a draft red herring prospectus dated July 15, 2016 with Securities and Exchange Board of India (“SEBI”) on July 18, 2016 (“DRHP”). The DRHP is available on the website of SEBI as well as on websites of the GCBRLMs and the BRLMs, at www.dspml.com, www.icicisecurities.com, www.india.clsa.com, www.db.com/India, www.edelweissfin.com, http://www.hsbc.co.in/1/2/corporate/equities-globalinvestment-banking, www.iiflcap.com, www.jmfl.comwww.sbicaps.com and www.ubs.com/indianoffers.  Potential investors should note that investment in equity shares involves a high degree of risk and for details relating to such risk, see “Risk Factors” of the DRHP. Potential investors should not rely on the DRHP filed with SEBI for making any investment decision. 

Disclaimer by IRDAI:

Insurance Regulatory and Development Authority of India does not undertake any responsibility for the financial soundness of our Company or for the correctness of any of the statements made or opinions expressed in the DRHP.

L/IA/0453/2016-17

About The Author

ClearTax helps individuals and business professional e-file their income tax returns. All you have to do is log on to ClearTax and upload your Form 16. We will prepare your income tax return for you automatically, it only takes 7 minutes.

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