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Today (July 31) is the last date for filing Income Tax returns (ITR) and so far, over 6 crore returns have been filed for the Assessment Year 2023-24.
Income tax is levied on the annual income of a person. As per the I-T Law, this period starts on April 1 and ends on March 31 of the next calendar year. The year in which income is earned is called as previous year and the year in which the income is charged to tax is called as assessment year.
Who should file ITR?
Anyone whose maximum income in a year exceeds the exemption limit of Rs 2,50,000 (for individuals under the age of 60 years) must file ITR. According to the income tax website, the following categories of people must also file an ITR:
1) The person is a resident and ordinarily resides in India, and who:(a) holds any asset (including any financial interest in any entity) located outside India, or(b) has signing authority in any account outside India, or(c) is a beneficiary of any asset (including any financial interest in any entity) outside India, or
2) An individual who has deposited more than Rs. 1 crore in aggregate in his Bank Current Accounts, or
3) Individual has incurred expenditure of more than Rs. 2 lakhs for foreign travel, or
4) Individual has incurred expenditure of more than Rs. 1 Lakh towards electricity consumption, or
5) Whose total sales turnover or gross receipt in the business exceeded Rs. 60 Lakh, or
6) Whose total gross receipt in the profession exceeded Rs. 10 Lakh, or
7) Total tax deducted and collected at source is Rs. 25,000 or more (Rs. 50,000 in case of resident senior citizen), or
8) Aggregate deposit in one or more savings bank accounts is Rs. 50 lakh or more.
But even if someone does not fall under these categories and earns below the exemption limit, it is recommended that they file ITR for record-keeping purposes. Although, it is not mandatory for them to do so.
How to file ITR?
The quickest way to do so is through the government’s website: http://www..incometax.gov.in/iec/foportal/, on which one has to register first.
To fill in the details here, documents such as the Aadhar card, PAN card, and Form 16, which has the record of the employer deducting tax from the employee’s salary and submitting it to the government. One can ask their employer for this form. Form 26AS and Annual Income Statement might also be required in some cases. Both of these can be accessed by going to the same government website.
What happens when someone misses the last date for filing ITR?
Even though one shouldn’t miss the last date to file their ITR if someone misses filing their income tax return before the deadline, they can still file a belated return with late fees, but they won’t be able to carry forward losses (such as those from investments) or avoid prosecution notices.
Individuals have to pay a penalty of up to Rs 5,000 under Section 234F of the Income Tax Act, 1961, while filing belated ITRs. Small taxpayers whose taxable income does not exceed Rs 5 lakh in a financial year have to pay a penalty of Rs 1,000.
What happens when taxpayers don’t file their ITR?
The taxpayers won’t be able to carry forward the losses incurred in the current Assessment Year if they do not file their ITR at all.
Moreover, a penalty equal to 200 per cent of tax payable on the underreported income shall be levied as per section 270A, if taxpayers miss to file their income tax returns.
Additionally, they can also face prosecution, if they willfully fail to file their return even after getting notices from the I-T department.
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