As we will see, many individuals dismiss tax filing as unnecessary and burdensome. Perspectives like this are not healthy.
All citizens of the country are expected to file tax returns each year as part of their moral and social obligations. The government uses it to determine the amount and means of expenditure of citizens, and it provides the assessee with a platform to request refunds, among other forms of relief, from time to time.
- A tax return is a sign of responsibility If you earn a specified amount of income each year, you are required to file a tax return by a predetermined due date. An individual must pay the tax as calculated. In the event of nonpayment of tax, a penalty may be imposed by the Income Tax Department. If you earn less than the prescribed level of income, you can file a return voluntarily. Filing a return proves that you are responsible for your taxes. Additionally, the tax department records the income generated by individuals and businesses with the applicable tax, if any, already paid, making it easier for them to enter into subsequent transactions.
- A tax return may be required in some circumstances. It is still possible to file taxes voluntarily, even if you do not qualify for mandatory filing. Typically, the registration of immovable properties requires the presentation of tax returns for the past three years as proof. Filing returns make the registration process more convenient.
- The home loan company will be most likely to insist on your return if you plan to apply for a home loan in the future. Therefore, it is a good idea to maintain a steady record of filing returns. You may even be required to file your spouse’s returns if you wish to apply for a loan as a co-borrower. Credit card companies may also request proof of return before issuing a card.
In fact, the government may mandate that financial institutions check your returns when transacting with you, encouraging individuals to file regular returns even if they’re voluntarily doing so.filing income tax return - Filing returns on time has many advantages regardless of whether you draw the prescribed income necessary to file returns if you want to claim adjustment against past losses.
An individual or business may incur a variety of losses for which there is no record in the tax return in the following year, including speculative losses, non-speculative losses, short-term and long-term capital losses, and a variety of other types of losses. For tax purposes, such losses cannot be shown as exemptions in the following year. You never know when you will need to claim an adjustment against a past loss, so it is best to file your tax returns regularly. - In the case of revised returns, filing returns may prove useful. If the assessee doesn’t file the original return, he can’t file the revised return later, even if he really needs to. If you don’t file your returns, you will face a Rs 5,000 penalty. While filing returns is a voluntary activity, it could have legal consequences for those who do not do so, especially if you have to file a revised return in the future.
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Online Filing of Income Tax Returns in India 2022-23 – How To Do It
