Income Tax: Filing a return even if there is no tax liability can bring benefits to the common man in many cases. Financial institutions often ask for return filing information in the case of a loan or credit card.
ITR Filing: The last date for filing income tax return for FY 2022-23 and assessment year 2023-24 is this coming July 31. This date is very important for individuals who have income from various sources.
Some individuals believe that they do not have a tax liability under the law, and therefore do not need to file a return. Such doubts are mostly seen among the older generation. But here are some facts that they don’t know. Let’s look at the need to file returns even if the common man is not liable to tax.
Money left behind without you knowing?
Many senior citizens invest their retirement corpus and live off the income from it. They believe that the income thus generated is derived through TDS. This is correct. But it is very stupid not to file the return saying this too. Because tax is determined on the basis of annual income. But tax deductions like TDS are transactional.
This means that this amount deducted from source is refundable if your annual income is less than the tax liability. In short, if your annual income is below the tax slab set by the government, you will get a refund of the amount deducted from you. But for this you need to file return. Did you hear this not only for senior citizens? Today many high value transactions are taxed at source. In such cases, a return must be filed to get a refund.
Who must file return?
Can everyone understand the context mentioned above? Apart from this there are some who have to file return compulsorily. Those who have invested in mutual funds, equities, bank fixed deposits etc. are liable to file return even if there is no tax liability. Those who earn income beyond the limit set by the government from various sources are also required to file returns.
Experts say
Experts say that the vast majority of common people will have no tax liability when considering the various deductions and rebates. But if the income before deductions and rebates is above the limit set by the government, such persons are required to file a return. The fact that there is no tax liability after deductions is not a reason for not filing a return.
Bank Deposits and Income Tax
Experts in the field say that if one has deposited Rs 1 crore or more in one’s current account or Rs 50 lakh or more in one’s savings account in a financial year, they have to file a return even if there is no income tax liability. Apart from this, ITR should also be filed if the tax levied on your income exceeds Rs 25,000 in a financial year. In case of senior citizens this tax deduction limit is Rs 50,000.