25 May 2018

Income Tax Filing Requirements!

Very soon it is going to be the tax filing season again!

For FY 2017-18 (AY 2018-19) the due date for filing of Income tax returns for most individuals is 31-July-2018.

Given the recent amendments in income tax filing rules and stricter due dates, a lot of salaried individuals are worried about what it means for them. (Read: One Return In One Year Is Now A Reality!) Hence, there is a lot of buzz around income tax filing requirements.

It is not uncommon to hear statements like –

  • Is it compulsory to file income tax returns?
  • Should I file my income tax returns or not?
  • I am not required to file my income tax return
  • My employer has deducted my TDS so I need not file my Income Tax returns.

This article aims to answer these questions and present a jargon free picture of income tax return filing requirements.

The following persons are compulsorily required to file their income tax returns as per section 139 of the Income Tax Act.

  • All individuals including Non Resident Indians (NRI)
    • Whose taxable income exceeds the basic exemption limit irrespective of whether or not the employer has deducted tax at source (Click here for income tax slabs)
  • All companies – irrespective of income i.e. profit or loss
  • All partnership firms and Limited Liability Partnerships (LLP) – irrespective of income i.e. profit or loss
  • Exceptional cases – in case of individuals who do not qualify as per point 1 above but
    • Who want to file a return of loss and carry forward the loss to subsequent year
    • Who want to claim a refund of income tax
    • For whom there is a long term capital gain during the year (even if the capital gain exempt from tax)
    • Is a resident Indian having overseas assets or financial interest in an entity located outside of India
    • Is a resident Indian being a signing authority in a foreign account
    • Who is receiving income from a property held under a trust, political party, research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust

Filing income tax returns regularly also helps in:

  • Visa application and foreign travel
  • Applying for housing loan or business loan
  • Applying for car loan, education loan etc
  • Applying for a credit card or other banking facilities

Consequences of non-filing or late filing of return:

  • Loss (other than loss under the head “Income from house property”) cannot be carried forward.
  • A belated return cannot be revised
  • Levy of interest under section 234A.
  • Levy of fee under section 234F
  • Exemptions/ deductions under sections 10A, 10B, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID and 80-IE are not available.

Get in touch with our Tax Experts for your Income Tax filing requirements.