Received Income Tax Notice? Find Out If You Need To File Returns

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The number of earning individuals in India when compared to those who pay their taxes is very high. To this end, the IT department has issued notices to people to pay their tax. Read this article to know if you are one of the few who need to file ITR.

India has a very small base of citizens paying Income Tax and an even smaller base filing returns. Over the years, it has tried hard, but failed, to increase these sets of people substantially. But the IT department has now started to get in touch with as many people who owe taxes as they can to force them into filing their returns. Now, who needs to file their returns?

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As per the Income Tax Act, it is mandatory to an income tax return in India if your gross total income (before any deductions) exceeds Rs. 2.5 lakh (Rs. 3 lakh if you’re above 60 years and Rs. 5 lakh if you’re above 80) in a financial year. It does not matter if you are earning the income as salary or as interest from your investments. Particularly if you’ve retired and have received your superannuation, you may be receiving more than Rs. 2.5 lakh in interest and would, therefore, need to file your returns.

File ITR before due date

Other reasons for filing returns are:

1. If you are applying for a visa or a loan.
2. If you are carrying forward a loss.
3. If you own a company.
4. If you have foreign assets.
5. If you are earning more than Rs. 1.8 lakh a year from renting out a property and your tenant is claiming HRA.
6. If you have income from a property held under a trust, a political party or a research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital or infrastructure debt fund.

In any of the above cases, you must file your returns. Do note that, once two years elapse, you cannot file a delayed return. However, a notice does act as an opportunity for those who did not file the returns during the two-year extended deadline period that is offered. You are allowed to file the return in response to the notice.

To conclude, there are various reasons one should pay their taxes. Just some of them that make you applicable to pay income tax are applying for a visa or a loan, carrying forward a loss, starting a company, having foreign assets or earn more than Rs. 2.5 lakh before any deductions.

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