1. As per the Income Tax Act, any person earning a taxable salary, exceeding the basic exemption limit, has to compulsorily file an Income Tax Return (ITR), even if the tax liability was reduced to zero post tax deductions.
2. Only those who earn up to, or less than, the basic exemption limit need not file tax return, but even for them, ITR filing is very beneficial.
3. Late returns cannot be revised for amending any mistakes.
4. All capital losses are allowed to be carried forward to the next year only if return is filed by the due date (31st July), except under heads of house property and unabsorbed depreciation, which can be carried forward.
5. Even if all taxes are paid, an ITR has to be filed, especially if you have been regularly doing so in the past, to avoid getting a notice if a gap in continuity is found later.
6. An ITR Receipt is more elaborate than a Form-16, as the latter shows salary and tax deductions by one employer, while ITR shows income from other sources also.
7. All major banks ask for copies of previous years' ITR receipts when granting loans, even with nil tax paid.
8. For claiming any refund due, even TDS refund on FDs, you will have to file ITRs, otherwise forego the refund.
9. Visa processing for foreign travel requires upto 3 continuous ITRs of previous years.
10. Term plan insurers ask for ITRs of previous continuous years for determining the income earned.
11. Participation in government tenders requires ITR receipts of upto five previous years.
12. For financial transactions done by self-employed persons, ITR receipts are the only proof of income and tax payment, as no Form-16 is issued to them.
INCOME TAX NOTICES
Income tax notices are sent under various sections as per clarifications required:
1. Section 131 (1A) - on suspicion of concealing a part of income, and asking for further documents for verification.
2. Section 142 (1) - on non-filing of ITR within stipulated time, and asking for supporting documents.
3. Section 143 (1) - as an acknowledgement that ITR filed has been assessed and tax computation found matching; or intimation of tax error asking to remit excess tax demand, or file application under section 154 for rectification to avoid a penalty.
4. Section 143 (3) - if ITR is subjected to detailed scrutiny, asking more supporting documents.
5. Section 147 - for submitting ITR-related supporting documents for reassessment.
2. Only those who earn up to, or less than, the basic exemption limit need not file tax return, but even for them, ITR filing is very beneficial.
3. Late returns cannot be revised for amending any mistakes.
4. All capital losses are allowed to be carried forward to the next year only if return is filed by the due date (31st July), except under heads of house property and unabsorbed depreciation, which can be carried forward.
5. Even if all taxes are paid, an ITR has to be filed, especially if you have been regularly doing so in the past, to avoid getting a notice if a gap in continuity is found later.
6. An ITR Receipt is more elaborate than a Form-16, as the latter shows salary and tax deductions by one employer, while ITR shows income from other sources also.
7. All major banks ask for copies of previous years' ITR receipts when granting loans, even with nil tax paid.
8. For claiming any refund due, even TDS refund on FDs, you will have to file ITRs, otherwise forego the refund.
9. Visa processing for foreign travel requires upto 3 continuous ITRs of previous years.
10. Term plan insurers ask for ITRs of previous continuous years for determining the income earned.
11. Participation in government tenders requires ITR receipts of upto five previous years.
12. For financial transactions done by self-employed persons, ITR receipts are the only proof of income and tax payment, as no Form-16 is issued to them.
INCOME TAX NOTICES
Income tax notices are sent under various sections as per clarifications required:
1. Section 131 (1A) - on suspicion of concealing a part of income, and asking for further documents for verification.
2. Section 142 (1) - on non-filing of ITR within stipulated time, and asking for supporting documents.
3. Section 143 (1) - as an acknowledgement that ITR filed has been assessed and tax computation found matching; or intimation of tax error asking to remit excess tax demand, or file application under section 154 for rectification to avoid a penalty.
4. Section 143 (3) - if ITR is subjected to detailed scrutiny, asking more supporting documents.
5. Section 147 - for submitting ITR-related supporting documents for reassessment.