ITR

Learn Income Tax Returns AY 2022-23 – Find Out If You Need To File them

The number of earning individuals in India is very high when compared to those who pay their taxes. Till now, the Income Tax Department has issued notices to people to pay their taxes. Read this article to know if you are one of the few who need to file ITR.

Latest Update 2023

You can file this year’s Income Tax Returns until December 31 with the late fee. This is your chance to fix and update your income tax returns if you need to correct your tax returns. There’s only one week left. If you earned income through online games, lotteries, or betting and didn’t mention it in your return, you can do it now.

India has a very small base of citizens paying Income Tax and an even smaller base when it comes to filing income tax returns. Over the years, the government has tried hard but failed to increase these sets of people who file their returns substantially. But the IT department has now started to roll out notifications to many people who haven’t paid their taxes. Now, who needs to file their returns?

When you file ITR, it offers several financial and non-financial advantages, such as relatively easy access to loans, avoidance of interest and penalties, the ability to claim a tax refund, simple visa processing, etc., and it is also a social obligation for every taxpayer.

What is an Income Tax Returns?

ITRs are tax return forms that taxpayers use to inform the Indian Income Tax Department of their income and assets (Indian Revenue Authorities). It contains information about the financial and personal information of the taxpayers. 

ITRs are essentially the taxpayer’s self-declarations of their income, assets, and any taxes that have been paid that are appropriate. Senior citizens have the option to file it manually even though most individuals file ITR electronically.

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Why is ITR Mandatory?

As per the Income Tax Act, it is mandatory to file Income Tax Return in India if your gross total income (before any deductions) exceeds 5 lacks in a financial year. It does not matter if you are earning the income as a salary or as interest from your investments. Therefore, you need to file your returns.

Every year, filing tax returns is viewed as a moral and social obligation of each and every responsible citizen of the nation. It serves as the basis on which the government calculates the amount and needs of citizen expenditures and offers the taxpayer a platform to occasionally request refunds in addition to other forms of relief.

Benefits of Income Tax Returns Filing 

Many people appear to believe that filing tax returns is optional, therefore they disregard it as pointless and difficult. There are various benefits when you file income tax returns every year. Check the following reasons to file an income tax return.

  1. If you are applying for a visa or a loan. It makes the process easier.
  2. If you want to carry a loss under capital gains to next year.
  3. If you own a company.
  4. If you have foreign assets.
  5. If you want to claim your TDS refunds.
  6. If you are earning more than ₹2.5 lacks a year from renting out a property and your tenant is claiming HRA.
  7. If you have income from property held under a trust, a political party or a research association, a news agency, an educational or medical institution, a trade union, a not-for-profit university or educational institution, a hospital, or an infrastructure debt fund.

Click here to know more about Income Tax Notice

What happens When you Miss the ITR Deadline?

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

Filing ITR Online (e-Filing ITR)

A sizable portion of returns are electronically filed, and the income tax administration is working to eventually make all forms available online. All registered taxpayers with taxable income are required to electronically file their income tax forms. However, persons over 80 years old who do not get any regular company or professional income may file paper returns.

Conclusion

To sum it up, there are various reasons one should pay taxes and file Income Tax Returns. The volume of tax return files has significantly increased during the past few years. Additionally, the government has put up a number of initiatives to promote the filing of ITRs by qualified taxpayers.

A person must submit an ITR to the tax department alerting them of the additional taxes that have been deposited against their PAN. The income tax division compares the information provided on the ITR with the data they already have. Refunds for income taxes are given out if the information is accurate.

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