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Before you know it, your return will be
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An income tax return is an income tax form which you need to fill and submit it electroncially to the Income tax Department. In this form you need to give details of your income and taxes (taxes - that you may have paid or other people who may have deducted your tax). The income tax returns form are in various formats viz ITR-1, ITR-2 etc. Each form depicts a separate category of Income tax payers. You need not worry of your category as Labhyansh handles it for you automatically.
Income tax is a Direct tax and you need to only report Direct Income (salary, Business Income, Capital Gain, interest etc) and taxes paid on that Income. The income tax returns formats are predefined formats by the Central Board of Direct Taxes (CBDT- which is also called the Income tax Department).
Income tax returns must be filed every year and must be filed by a specific date. If the return shows excess tax has been paid during a given year, you are eligible for a ‘income tax refund’, subject to the department’s assessment.
Income tax returns is an annual event and is a moral and social duty of every responsible citizen.
Filing returns is a sign that you are responsible
The government mandates that individuals who earn a specified amount of annual income must file a income tax return. Failure to pay income tax and file the income tax return will invite penalties from the Income Tax Department.
Those who earn less than the prescribed level of income can file their income tax return voluntarily.
Loan or credit card company may want to see your income tax return
If you plan to apply for a home loan in future it is a good idea to maintain a steady record of filing income tax returns as the home loan company will most likely insist on it as a proof of steady income. Even a credit card company may insist on proof of income tax return before issuing a credit card.
Financial institutions may insist on seeing your returns over the past few years before transacting with you. In fact, the government may make it mandatory for them to do so, thereby indirectly nudging individuals to file returns regularly even when it’s voluntary.
To claim adjustment against past losses, a return is necessary
Various losses incurred by an individual or a business cannot be shown for exemption in subsequent years for the purpose of tax calculation if your return is not filed. These losses could be both speculative as well as non-speculative, short term as well as long term capital losses and various other types of losses not recorded in the income tax return in a financial year. So it’s best to file returns regularly, because you never know when you may want to claim an adjustment against past losses.
In case do not file, the Income tax Department will send a notice asking to file your return and may ask you to pay a penalty for not filing your income tax return. You will not be given your refund. If you are found to owe the government taxes, the interest on the base tax keeps adding up till you pay.
If you are found to owe the government taxes money, then the interest keeps adding up till you pay. A penalty may also be levied.
Under the Income Tax Act, non-filing of returns can attract a penalty of Rs 5,000. A new section 234F has been inserted in Income Tax Act, 1961 with effect from Assessment Year 2018-19 (Financial Year 2017-18). Under this section, fee (penalty) is levied if the Income-tax return is not filed within due date.
Listed below are some of the common tax filing mistakes that must be avoided:
Taking professional income tax returns filing service, can help you avoid most of these mistakes.
How to file Income Tax return: Contact us for more details.
Annual Income Tax return filing applicable on all assesses
Annual Tax Audit, As per applicability
Transfer Pricing Audit, on related party transactions
Monthly payment & Quarterly returns on certain expenses and payments
Monthly payment & Quarterly returns on sale of certain products
As per applicability on assesses
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