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Filing returns can save you from future I-T trouble
Filing tax returns is an annual activity, which must be fulfilled as a moral and social obligation.
While it adds to government's income, it also helps the assessee to claim refunds and other relief applicable during the year of filing. And, if you don't file the tax on time, it invites interest and penalties.
The last date for filing returns is July 31 for financial years ending on March 31. In case of taxpayer, whose accounts require auditing, the date is generally 30th September.
Legal and social implications
Filing the returns provides legal sanction to your income. The government has made it mandatory for all citizens to file returns even if their income is not taxable.
Filing returns makes it easier for individuals and firms to enter into subsequent transactions, as the income they have shown is now in the knowledge of the tax department.
This is also a means by which every right thinking citizen contributes to the progress and development of the nation.
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Filing returns can save you from future I-T trouble
The money collected through taxes is the corpus from which the government undertakes welfare activities.
Advantages
Apart from helping the cause of the nation, filing income tax returns on time has many other advantages.
Processing of home, education and other types of loans require income tax returns to be shown to the lending institutions. Thus filing returns makes loans easier to process.
If you are applying for a visa to visit a country, many of them compulsorily ask for income tax returns.
Registration of immovable properties in most states requires owner to produce tax returns for the last three years. Filing returns makes such registration easier.
Filing returns, whether eligible for taxes or not, helps to pad up legally tenable income that will be useful subsequently to account for the wealth and property owned.
Consequences of not filing returns
There are several disadvantages of not filing the tax returns on time.
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Filing returns can save you from future I-T trouble
Take an example of losses faced during a financial year. Government allows you certain exemptions if you incur losses, and you can carry them forward in next financial years. However, If you do not file returns on time, these losses cannot be used for exemption in the subsequent years.
Technically speaking, in case the original I-T return under Section 139(1) of the IT Act has not been filed then the revised return under Section 139(5) also cannot be filed subsequently when the assessee needs it.
Under the Sections 235(A), 235(B) and 235(C) of the IT Act, non-filing of returns by assesses can attract a penalty of Rs 5,000 from the IT department.
While filing of income tax returns may seem a voluntary activity on the face of it, there are legal provisions against those who do not do so.
To be on the right side of the I-T laws, every one should file returns, even if their salary falls in the lowest income bracket, exempted from tax.
Additionally, filing of proper returns on time lends you a peace of mind, as it declares all your income as legal.
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