What does income tax mean?
The two types of taxes imposed are direct taxes and indirect taxes. A sort of direct tax known as income tax is imposed based on the income of the individual. Different sorts of revenue include wages, real estate, businesses, capital gains, and income from other sources. The taxpayer must pay income tax if his total income after using the Chapter VI-A deduction exceeds the threshold for taxable income.
What is the significance of ITR filing?
One must file tax returns in order to be a law-abiding and accountable citizen.
The following is a list of the advantages and significance of doing so:
To avoid paying a fine: People who fail to submit and pay their taxes are subject to severe fines from the tax authority.
A punishment of Rs. 10,000 would be assessed under section 234F for failure to file tax returns, which is a hefty price for the typical citizen to pay. To borrow money from a bank: The ITR for the past three years is required when requesting a loan to pay for a home, automobile, or medical care. ITR information is crucial: These records, which are more thorough than Form 16, are necessary to prove your salary. It includes information about your salary and other sources of revenue. Getting a VISA ITR receipts from the prior year are required by various foreign embassies, including those in the UK, US, Canada, and Australia, in order to process VISA applications. It helps to reassure them that while you live there, you are capable of taking care of yourself.
To make up losses incurred in the following fiscal year: Unless you submit an ITR, you are not permitted to carry over any losses to the following fiscal year. It is crucial to file the returns in order to be able to write off losses in later years.
What happens if we forget the date?
If an ITR is not submitted by the deadline, it’s possible that the taxpayer can still file the returns after paying the necessary fines. Belated returns are what we term these filings. A fee of Rs. 5000 is processed in these circumstances. If you submit anything after December 31st, you will be fined Rs. 10,000.
What if prior years’ income taxes weren’t filed?
You may file an ITR beyond the deadline if one was not submitted for the prior years. You must, however, pay a Rs. 5000 punishment for missing the deadline. You might not be required to pay any fines if you have a valid reason for not filing and the officer is pleased with your justification.
Who Could Provide an ITR Post-Last Date Without Any Late Fees?
According to the income tax regulations, individuals whose gross total income is less than the basic exemption limit are excluded from paying the late fee under section 234F when the deadline for filing an ITR has passed.
The person who depended on the tax system is subject to the basic exemption cap. According to the most recent regime, regardless of age, the fundamental exemption ceiling is Rs. 2.5 lakh because there are no mutual advantages. In contrast to that under the previous income tax system, the basic exemption ceiling depended on the person’s age.
Under the previous tax system, the basic exemption threshold for residents who are under 60 years old is Rs 2.5 lakh, and it is Rs 3 lakh for those who are over 60 but under 80 years old.
Therefore, even if the last date has passed, if the person meets all of these requirements, they are still allowed to submit the ITR without paying a late charge.
Who will be exempt from paying a fine for submitting a late itr?
Not everyone is obligated to pay a late filing charge for submitting an ITR after the deadline has passed, according to income tax legislation. A person who submits a belated ITR and whose gross total income does not exceed the basic exemption ceiling is not subject to a late filing penalty.
Who, even if their gross combined income is below the basic exemption limit, must nevertheless pay a penalty.
a) Who have deposited money into one or more current accounts held with a financial institution or a cooperative bank in sums totaling more than Rs 1 crore; or
b) Who has spent more than Rs 2 lakh for himself or any other person to travel abroad, whether individually or collectively.
c) if you own assets located abroad, such as stocks in a foreign corporation. If you don’t submit your ITR by the deadline and you are an ordinarily resident individual with income from overseas assets and your taxable income is below the threshold level, you will be subject to a penalty.