By Chirag Nangia
Individual taxpayers are expected to file tax returns compulsorily, just before the due date, if their gross total revenue of the economic year, as computed in accordance with the provisions of the law, surpasses the simple exemption limit. There are particular categories of person taxpayers for whom furnishing of ITR is mandatory, irrespective of whether or not their revenue exceeds the exemption limit:
Non-residents and foreign asset holders
Non-resident folks are taxable in India on revenue, which is either received or has accrued/ arisen in India. Thus, an person non-resident, possessing India-sourced revenue, exceeding the simple exemption limit (`2.5 lakh, irrespective of age) is expected to file the ITR. Additionally, a resident person, holding any asset outdoors India, either in person capacity or in his capacity as advantageous owner, is expected to file ITR even if his total revenue is under the simple exemption limit.
Interestingly, filing of ITR is needed for carrying forward any losses sustained through the year for set-off in subsequent years. Likewise, an person whose revenue has suffered deduction of tax at supply (TDS), but his final tax liability is under taxable limit have to file the return of revenue to claim refund of TDS.
Implications of Form 26AS
Income Tax division accords the taxpayers a statement in Form 26AS containing facts of different taxes deducted from the revenue of taxpayers. The CBDT has not too long ago revamped the kind to involve extra facts suitable from taxpayers’ higher-worth transactions to details about pending/completed proceedings. Every taxpayer have to download their Form 26AS from the revenue tax portal and verify the receipts appearing in the Form 26AS. If revenue reflected in Form 26AS is much more than the simple exemption limit, a single have to file a tax return to stay clear of scrutiny assessment.
With impact from AY 2020-21, taxpayers have been permitted to opt for an option/easier tax regime, which presents six slabs with low tax prices to taxpayers, if they forego a set of 70 exemptions and deductions offered below revenue tax laws (which includes LTC, HRA, common deduction, deduction below chapter VI-A, and so on.).
Under this new regime, the simple exemption limit for all folks will be `2.5 lakh, regardless of their age. Consequently, filing of ITR shall be mandatory for all folks opting to spend taxes below the new regime and possessing gross total revenue exceeding `2.5 lakh.
Consequences of non-filing of ITR
While filing ITR has its advantages, non-filing of the similar can lead to penalty and prosecution. Accordingly, it is crucial for a individual to verify whether or not or not they are liable to file ITR.
(The writer is director, Nangia Andersen India. Inputs from Vasudha Arora.)