The article talks about the importance of filing tax returns even if the income of a person falls below the taxable limit. It lays emphasis on the fact that benefits of filing the return are more compared to the efforts involved in filing ITR. The article explains income tax return. It deals with an important question – is it mandatory to file ITR? A general misconception prevails among taxpayers that if there is no tax due, one is not required to file a return. But, they are wrong. A person is supposed to file a tax return in case his/her gross total income before allowing any deductions under sections 80C to 80U of the Income-tax Act, 1961, exceeds Rs.2.5 lakh (Rs.3 lakh for taxpayers older than 60 years and Rs.5 lakh for those older than 80 years) in the financial year.
The article further elaborates on the reason behind the tendency of people i.e. not to file tax returns. Mere laziness is the reason that people either file ITR late or do not file it. Apart from this, another reason is ignorance or confusion about the process of ITR filing such as which tax forms to use, when to submit, what information to give, etc.
In addition to the above, there is also a misconception that if taxes due are deducted at source in the form of TDS, then no need to file ITR. People do not realise that the final tax rate applicable may turn out to be different from the TDS rate. Due to this, you either have to pay more tax or expect a refund.
The article also discusses the advantages of filing a return without taxable income. These benefits include claiming a tax refund, carry forward losses, easy loan processing and VISA processing. Failing to file the ITR, the tax officer may levy a penalty of up to Rs. 5,000 (under section 271F). Those who owe taxes and do not file ITR are liable to pay additional interest (section 234A), in addition to other penalties for evading taxes.
Source : Live Mint