There are several reasons behind filing his or her return of income.
Every taxpayer is required to file a voluntary and mandatory return of income within the specified time limit, as notified by the Central Government; otherwise, he or she has to be liable to pay a penalty and interest on the value of the tax. Section 139(1) to (9) of the Income Tax Act deals with provisions of the Return of Income. In this article, the author tries to point out several crucial reasons why you must file returns of income periodically before authorities. Reasons to file a return of income are as follows:
1. To make the loan process easy
If any person, firm, company, or category as defined under the aforesaid laws wants to apply for a home loan, business loan, property loan, or any kind of loan, in several cases the banker or lender will be demanded to submit income proof along with their annexures attesting two or three years before sanctioning the loan. So that, every person has to file a return of income.
2. To claim TDS refunds
When TDS has been deducted from the income of the person, it can be adjusted from his or her tax liability or claim of refund by filing a return of income.
3. There can be forward losses
Any person who has bear losses and wants to carry forward and set off losses under the heads Capital Gains, House Profits, Business, or Profession to the next financial year may do so by filing a return of income.
4. You can apply for a visa or credit card
Any person applying for a visa for an international trip or a credit card then has to submit income proof, i.e., a return of income.
5. In the case of a weapon license
Any person who wants to apply for an arms license before the concerned authority has to be required to submit a return of income. For this reason, you will need to file a return of income.
6. For applying for a government contract
Any person who is required to take any contract before the central or state government has to provide a return of income.
7. It contributes to nation-building
Any tax paid by individuals helps build our nation. The government uses the amount of tax for building infrastructure and other developmental activities.
Except for the above, any person has to file a return of income as a mandatory provision under the seventh proviso of the aforesaid section, as follows:
Who must file income tax returns mandatorily?
In some cases, a person has to file a return of income as mandatory under the seventh proviso of Section 139.
i) if deposited an amount or aggregate of the amount exceeding rupee one crore in one or more current accounts maintained with a banking or co-operative bank; or
ii) has incurred expenditure of an amount or aggregate of the amounts exceeding rupees two lakhs for himself or any other person for travel to a foreign country; or
iii) has incurred expenditure of an amount or aggregate of the amounts exceeding rupees one lakh towards consumption of electricity; or
Further, state other prescribed conditions, as may be prescribed.
Generally, July 31st is the last date for filing the return of income in the case of an individual or HUF. If compliance is not within the time limit as prescribed by the government, it will attract penal and interest provisions under the law.
The author can also be reached at kumar.harendera@gmail.com
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