Ajay’s total salary was not subject to income tax, so he was comfortable with the fact that he did need not to file an income tax return. However, one day the Income Tax Department sent a notice to Ajay for not filing an income tax return. It said, ‘Why you shouldn’t be penalized for not filing an income tax return?’. Ajay was very upset to see this notice from the Income Tax Department.
He came straight to our office and showed the notice and said, “I don’t have a taxable salary so I am not paying income tax, so I don’t even need to file a return. So, why should I be penalized for not filing a return?” This question of Ajay is being asked by many. Following Ajay’s same question, I explained to him that your Income does not determine whether you have to file an income tax return or not. There are a few other things to keep in mind.
To understand this topic, Let us discuss some of the provisions of the Income Tax Act for the Financial Year 2021-22 regarding the filing of income tax returns. With this, you can also verify whether it is mandatory for you to file your income tax return or not.
1. According to the Income Tax Act, if you are a super senior citizen (age 80 years or above) and your income is more than Rs.5, 00,000/- it is necessary for that person to file an Income Tax Return.
2. If you are a senior citizen (age 60 years or above) and your income is more than Rs.3, 00,000/- then it is necessary for that person to file an Income Tax Return.
3. Also, if you are under 60 years of age and your income is more than Rs.2, 50,000/- then it is necessary for that person to file an Income Tax Return.
In addition, you are required to file an income tax return even if the following conditions are met in your case and your total income is less than the income limit mentioned above.
1. If you have spent more than two lakh rupees for a foreign trip for yourself or anyone else, or
2. The cost of your electricity bills in aggregate is more than one lakh rupees in a financial year, or
3. You have deposited more than Rs. 1 crore in one or more of your current bank accounts in one financial year, or
4. If you are a resident Indian and If you are receiving some income from abroad or have any property in your name in abroad or you have a beneficial owner for property situated in abroad, you are required to file your income tax return.
In case, you are required to file the income tax return and you have not filed it, you may be penalized up to ten thousand rupees by the Income-tax Department.
You also need to consider some of the benefits of filing an Income Tax return.
1. Income tax return is one of the important documents while taking a bank loan. It is considered as proof of your income and accordingly, the bank sets the limit of your loan.
2. Many countries require the filing of an income tax return filed in previous years in the visa process. It determines whether you are eligible to spend your money abroad by estimating your income.
3. If you are filing an income tax return, the limit of cashless tax withdrawal from your bank account can be increased from Rs 20 lakh to Rs 1 crore.
4. Of course, you can also save the extra penalty charged by the Income Tax Department by filing your return.
