In India, hardly two percent of population
pays income tax. That means 98 percent of the people are not having their IT
files. The government is keen on widening the tax base and has made it
mandatory for certain categories of persons to file their It returns. On
analysis, it has been noticed that large numbers of persons have fear psychosis
about income tax. They apprehend, once the file is opened, it may cause a lot
of hassles.
In earlier
years, Tax Rates were also high. But now the scenario is fast changing. Tax
rates have been lowered. W.e.f. financial
year 2014-2015, i.e. A.Y. 2015-2016, the general exemption limit has been
increased to Rs 2,50,000/- (earlier Rs 2,00,000/-) and Rebate in Tax under Section 87A has been increased to Rs 5,000/-
for A.Y. 2017-18 (earlier from AY 2014-2015 to 2016-2017 Rs 2000/-). The
provisions of section 56(2)(vii) relating to gifts were modified to cover
specified gifts in kind w.e.f. 1.10.2009 and the same were further modified by
the Finance Act-2010, Finance Act-2012 and Finance Act-2013. W.e.f. AY 2012-13
a new category of the tax payers of 80 years or more (super senior citizens)
had been introduced with the exemption limit of Rs 5 Lakhs. It may also be
noted that individuals as well as HUFs are required to file their Income Tax
return (subject to some exemptions in case of salaried employees) if the Income
before allowing Exemption u/s 10A, 10B or 10BA exceeds the exemption limit. The
I.T. department over the past few years improved on computerization and has
provided the online facility of E-filing of IT returns. The I.T. department has
drastically changed the Assessment policy and how almost 98 percent returns are
being accepted without any question. However, people may have a number of
questions about starting a new I.T. file. This question is dealt hereunder:-
Now, It is
not necessary to have taxable income to file a new income tax return. Now all
the companies and the firms whether having taxable income or not, are obliged
to file their Return of Income. It may also be noted that Individuals or HUFs
etc are require to file their income tax return w.e.f. AY 2006-2007 (subject to
some exemptions in case of salaried employees), if the income before allowing
deductions under chapter VI-A and before allowing exemptions u/s 10A, 10B or
10BA, exceeds the exemption limit.
Section
139(1C) has been inserted to provide w.e.f. 1.6.2011that the CBDT shall notify
the class of persons (like some salaried
employees) who may not be required to furnish their IT returns if proper tax
has been deducted at source by their employer.
Even in
cases, where an Assessee is not required to mandatorily file an income tax
return, it is advisable to have an IT file considering the following:-
1. In case of
salaried employees, at the time retirement, their savings is accumulated and
when they acquire any property or make investment, the Income Tax Department
may ask question to explain the same, which becomes quite difficult as by that
time the accumulated funds may be the tune of several lakhs.
2. Similarly,
ladies get come gifts in cash or in kind on the occasion of marriage as well on
other occasions. Such money is generally invested and in course of years, it is
multiplied. At a later stage, when the accumulated amount becomes considerable,
the Assessing officer may be reluctant in admitting the same and mat raise
queries. In case of search or raid by IT Deptt, it becomes more difficult to
convince the officers about the source and ownership of such money and other
assets in case the person does not files his income tax return. It may be noted
that in case of search, the income of previous year may be treated as
undisclosed, if no return has been filed for the relevant assessment year and
the due date for filing the return u/s 139(1) has expired.
3. The parties to whom a person may advance
money by way of loan or deposit may also insist for Income Tax PAN to avoid
inconvenience in their assessment.
4. It has been
made obligatory to mention PAN in respect of various monitory transactions, the
scope of which has been enlarged vide various notifications by Govt.
5.
While making
any investment in shares or debentures, one is required to mention the PAN.
6. Some people
may deduct Tax at source while paying amount as rent, Interest or commission
etc. In case to get its refund (if you have income below taxable limit), one
must have its IT file, Pan and file IT Return.
7.
If one wants
to travel abroad it is helpful if she/he is having and I.T. File.
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This Post is just a knowledge sharing initiative for mutual discussion and
author does not intend to solicit any business or profession.
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