Taxpayer is required to file his Income-tax return on the basis of income earned by him for the Financial year. Central Government decides slab rates for individual and other taxpayer for filing their Income-tax returns.
If the total income of the taxpayer exceeds this exemption limit, the taxpayer is mandatorily required to file his Income-tax return.
Following are some of the cases where the taxpayers are required to file their Income-tax return-
- To claim the refund:- Tax is deducted by the employer on salary received by the taxpayer during a Financial year. Here, taxpayer is required to disclose other incomes viz. Salary from previous employer, House property income, Interest income etc.to his current employer. He is also required to disclose the eligible tax saving deductions such as life insurance premium, contribution to PPF, PF, NPS etc., health insurance, term deposits etc.
Employer has to consider these details while deducting TDS on salary. It might happen that the taxpayer fails to submit the documents of the eligible deductions in time, leading to excess deduction of tax on salary. In such cases, taxpayer is required to consider such deductions while filing his Income-tax return to claim the refund.
- To carry forward the loss:- Taxpayer may suffer losses during the financial year viz. house property loss, capital loss or business loss. Such loss could be set-off against the incomes earned during the financial year. However, if the loss still persists, then the taxpayer is required to file his return to carry forward the loss to the next financial year.
In some cases, the taxpayer is required to file his Income-tax return within due date. If he fails to file the return within due date, he cannot carry forward the loss to next financial year.
- Application for finance:- Filing of Income-tax return reveals the credibility of the taxpayer. When a taxpayer applies to banks or financial institutions, he requires to submit a project report for future credit worthiness. However for past tax records of the taxpayer, banks insists on providing the copies of Income-tax returns from the taxpayer for atleast previous three financial years.
- Application for visa:- Where the taxpayer is applying for visa, his Income-tax returns are required to be submitted to the visa authorities.
- Contribution to the sustainable development of country:- Being a responsible citizen of India, its our duty to pay all the taxes and file the returns within due dates. The funds collected by the Government as taxes are going to be utilized for the faster growth and development of the country. Hence the taxpayers gets the taxes paid in return in form of latest infrastructure in India.