Are you unsure whether you should file an income tax return in India? Read on to know more.
Let’s understand whether you are required to file an income tax return in India for FY 2021-22
The government has released a notification vide Notification No. 37/2022 dated 21st April 2022 that specifies additional conditions for filing income tax returns if income is below the basic exemption limit.
The conditions specified in the said notification are mentioned below:
The Act already contains certain conditions for filing an income tax return, even if the income is below the threshold limit. The requirements are:
In any of the following situations (as per the Income Tax Act), you must file an Income Tax Return in India:
NRI or not, any individual whose income exceeds Rs 2.5 lakh (for FY 2020-21) is required to file an income tax return in India. The limit is the same for all individuals. There is no higher threshold limit for senior or super-senior citizens. Please note that for an NRI, income earned or accrued in India is taxable in India.
There is one more exception for the NRI taxpayers. Unlike the resident Indians, if there is a long-term or short term capital gain, the non-residents are not eligible to benefit from the basic exemption limit. Hence, if the capital gains exceed Rs 2.5 lakh, the NRI must file an income tax return.
A significantly large number of returns are e-filed, and gradually the income tax department is hoping to bring all returns online. It is mandatory to file the income tax returns online for all the registered taxpayers whose taxable income. However, paper returns can be filed by those above 80 years of age who do not have any income from regular business or professional income.
There are some legal consequences for late filing if you get away with putting this off by the due date.
Under section 271F, the assessing officer may levy a penalty of Rs 5,000 when you have not filed your return (applicable until FY 2016-17).
From FY 2017-18 onwards, penalties for non-filing an income tax return are as follows:
Note: Penalty is limited to Rs 1,000 for those with income up to Rs 5 lakhs. These provisions are covered under a new Section 234F.
From FY 2020-21 onwards, the maximum amount payable on late filing of return is reduced to Rs 5,000.
Hence, from FY 2020-21 onwards, if the taxpayer file an income tax return after the due date, a penalty of up to Rs 5,000 shall be paid. However, there is no change in the penalty amount of the taxpayers with income below Rs 5 lakhs, i.e. the penalty is Rs 1,000.
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