Income Tax Know-how
Do you need to file your income tax returns (ITR)?
Because if you don't, the taxman could come knocking
Updated on: 17-Jul-2023 •Research Desk
"Oh, I just love the tax season!" said no one ever. But you can't have what you want. And paying your tax is one of them. That said, it is a civil duty for all responsible citizens that want to build a strong, healthy nation.
Now that we have appeased all sections of our readers, let's understand who all need to file their tax returns (ITR) by July 31 this year:
Old tax regime
| If you are... | If total gross income exceeds... |
|---|---|
| Below 60 | Rs 2.5 lakh per year |
| 60-80 age | Rs 3 lakh per year |
| Above 80 | Rs 5 lakh per year |
New tax regime
| If you are... | If total gross income exceeds... |
|---|---|
| All ages | Rs 3 lakh |
The others who need to file their tax returns are
| If you have spent more than Rs 2 lakh when abroad |
| If you have paid an annual electricity bill of over Rs 1 lakh |
| If you have deposited a total exceeding Rs 1 crore in bank current account |
| If you have deposited a total exceeding Rs 50 lakh in a savings account |
| If you have received income from a foreign country |
| If your TDS or TCS was over Rs 25,000 (Rs 50,000 in senior citizen's case) |
| If you want to claim a tax refund |
| If you have made investment losses and want to carry it forward to the next financial year |
Please note there are other exceptions too.
What if you miss the July 31 ITR-filing deadline?
If you miss the July 31 deadline but pay by December 31, you'll need to pay a penalty.
| If your income exceeds Rs 5 lakh | Penalty: Rs 5,000 |
| If income is less than Rs 5 lakh | Penalty: Rs 1,000 |
In addition, you'll be charged a 1 per cent interest each month on the outstanding tax amount.
For example, if your tax liability is Rs 10,000 and you don't pay on time, your penalty will keep increasing by Rs 100 each passing month that you fail to pay.
And those who fail to file ITR by December 31 can suffer severe consequences, including imprisonment.
Apart from not going to prison, are there other benefits of filing tax returns?
There are quite a few advantages. Let's list some of the most obvious ones:
-
Tax refund. In other words, you may get some money back from the government if they find you paid more tax than you needed to
-
Faster visa processing
-
Get loans more easily
- Offset investment losses in future. This way, you can reduce your capital gain tax liability in the future
Even those who are excluded from filing their ITR can enjoy some of these benefits. So, to answer the question of this article - 'Do you need to file your income tax returns? - we'd suggest everyone files their returns. Even if you have to pay zero tax.
Suggested read: Six popular tax-saving investments in India
