Is filing IT returns mandatory? The answer is yes! If you have taxes to pay or have paid your taxes, you will have to file your Income Tax return. Here’s more info on that.
You’ve just paid your taxes. You congratulate yourself on being a good citizen and give yourself a pat on the back for having done your duty. With a big smile on your face, you check ‘Taxes’ off your list of things to do and tell yourself that you’re done. But wait! There’s more to taxes than just paying them. Have you also filed your Income Tax (IT) return?
There is a misconception among many people that if they have paid their taxes on time, they’re in the clear and need not file their IT return. If the government has already received its share of revenue from the tax collected, that should be enough right? Well, not really. You actually have a constitutional obligation to file your IT return on time, every year, after your taxes have been paid. Just paying your taxes is not the end of your duty as a responsible citizen.
Let’s learn a little more about the importance of filing your IT return.
When do you pay taxes?
It is essential that you file your Income Tax return when you don’t fall under the basic tax exemption limit set by the government for a financial year. Currently, for the financial year 2018-19, the tax exemption slabs are as follows:
For the salaried:
| Salary Slab | Tax payable |
| Earnings up to Rs. 2,50,000 in a year | Nil |
| Total income exceeds Rs. 2,50,000 but is less than Rs. 5,00,000 | 5% of total income |
| Total income exceeds Rs. 5,00,000 but is less than Rs. 10,00,000 | 20% of total income |
| Total income exceeds Rs. 10,00,000 | 30% of their total income |
For senior citizens (above 60 years but less than 80 years):
| Salary Slab | Tax payable |
| Earning up to Rs. 3,00,000 in a year | Nil |
| Total income exceeds Rs. 3,00,000 but less than Rs. 5,00,000 | 5% of their total income |
| Total income exceeds Rs. 5,00,000 but less than Rs. 10,00,000 | 20% of their total income |
| Total income exceeds Rs. 10,00,000 | 30% of their total income |
For senior citizens (above 80 years):
| Salary Slab | Tax payable |
| Earning up to Rs. 5,00,000 in a year | Nil |
| Total income exceeds Rs. 5,00,000 but less than Rs. 10,00,000 | 20% of their total income |
| Total income exceeds Rs. 10,00,000 | 30% of their total income |
Benefits of filing your Income Tax Return
Here are some reasons why you should file your IT return.
- It acts as a proof of income when you apply for a loan. Banks verify your income tax return documents for the previous two or three years before disbursing your loan.
- If you are planning to apply for a visa or are travelling abroad, you need to keep your Income Tax return documents handy. In case you do not have these documents in place, your visa formalities might be delayed and your visa may even get rejected.
- It is necessary to file your return if you want to claim any excess TDS that was deducted from your salary and get an income tax refund. So, if you don’t want to lose your hard earned money, make sure you file your IT return.
What happens if you evade your taxes?
Anyone found concealing their income and evading taxes will be charged with a penalty amount that can range from 100% to 300% of the tax amount due. Additionally, it’s not a very pleasant experience to come under the scanner of the Income Tax department. You don’t want to end up having dreams about being chased by the taxman!
Additional Reading: What to do when you receive an Income Tax notice
Important dates to keep in mind
Generally, the last date for filing your Income Tax return is 31st of July every year, unless the government plans to make an exception and extend the deadline.
You need to submit all your tax document proofs on or before March 31st every year. As a responsible citizen, it’s important that you understand the need to file your Income Tax return.
Done with tax filing? Want to plan your taxes for next year? We have plenty of tax-saver Fixed Deposits and Mutual Funds.