Why should you file your tax returns
All of us know that July 31 is the last date for filing your tax returns.
Yet, some of us omit to file tax returns for a variety of reasons – real or imagined.
FEW REASONS WHY PEOPLE DON’T FILE THEIR RETURNS
Ignorance
- Hey, TDS has already been deducted on my salary. So, I don’t think I need to file my tax returns.
- My income is below Rs.5 lakhs. I believe the government has exempted me from having to file my tax returns.
- I did it once last year. Am I supposed to file my returns this year too?
- I was too busy to file my returns in time. Now that the due date has passed, I guess there is nothing that I can do about it.
- I have never filed my returns earlier. How do I go about this process?
INERTIA
- I’ll surely file my returns. The last date is so far away…zzzz…uh, OMG ! How did the last date of return filing slip past me?
- Yes, Yes, I know that I have to file my returns. But I simply don’t have the time to collate the required docs and info.
CASUAL, NON-COMPLIANCE ATTITUDE
- How does it matter if I don’t file my returns?
We present below a few motives that should prompt you to file your returns without delay.
FEW REASONS WHY YOU SHOULD FILE YOUR RETURNS
TAX FILING IS MANDATORY
- Every individual (other than a senior citizen) with income exceeding Rs.2 lakhs is required by law to file her/his tax returns.
- Persons with salary income below Rs.5 lakhs NEED to file their returns too. The exemption extended to such persons in two years (FY 2010-11 & 2011-12) stopped being applicable from FY 2012-13 onwards.
- Senior citizens (person aged over 60 years) with income above Rs.2.5 lakhs have to statutorily file their tax returns.
Note: Electronic filing (e-filing) is mandatory for all individuals whose taxable income for FY 2013-14 is above Rs.5 lakhs.
Remember, ignorance of the law is not a valid defence for non-compliance. Thus, it is advisable that you consult a tax expert to familiarize yourself with elementary tax rules and avoid getting into trouble.
NO FILING, NO REFUND
- If you are eligible for refund of excess tax paid by you, then you will need to file your returns in order to claim the same.
NO FILING IN TIME, NO CARRY FORWARD OF LOSSES
- You will be allowed to carry forward loss (in respect of any capital asset or other income source) only if you have filed your tax returns within the due date.
AVOID PENALTIES
- For FY 2013-14, if you fail to file your tax returns before March 31, 2015, you may be liable to pay a penalty of Rs. 5,000/-.
- Also, delay in filing tax returns is only permitted up to two years. Thus, currently, one can file returns for FY 2013-14 & 2012-13 only. Penal interest is levied on returns filed after the due date if there are pending tax liabilities.
CREATE WHITE MONEY
- Filing of tax returns is an anti-black money activity. By filing your returns, you formally declare your income and assets thereby enabling the creation of an officially approved financial profile for yourself. This will help to prove that you have a valid source of income should, at any time in future, you wish to create investments.
MULTI-PURPOSE RECORD
- Your tax records provide the basis on which you could smoothly avail of loans (home, personal, vehicle, others) in future. Since tax returns are globally accepted as standard income proof, they could be critical to the execution of your overseas plans in respect of travel, education and employment.
AVOID BEING NOTICED
- The last and most compelling reason for you to file your returns is that whatever be your reason for non-filing of returns, it is simply going to be treated as an excuse by the tax authorities. For your inaction, don’t expect to receive any sympathies from them. But, yes, you can surely expect to receive notices from them.
Hence, begin your preparations now and file your tax returns well before the due date. You could file your returns by yourself or with the assistance of a tax expert.
File your returns, accurately and in time, and be happy and relaxed.
Happy Filing !!!
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