ITR Filing: The self-assessment of income is intimated to the income tax department through the filing of the return of income.
Income Tax Return 2019: Several salaried taxpayers who have the taxes deducted from their salary income by their employer in the form of tax deducted at source (TDS) think of not filing the income tax return (ITR). Their premise is that as they do not owe any more taxes to the government, filing ITR can be skipped or ITR filing can be delayed by them.
However, as per the income tax rules, TDS is paid during the financial year and it takes the character of the tax due only on the completion of the self-assessment of one’s income. The self-assessment of income can be done only once the financial year has ended i.e. once the assessment year begins. The self-assessment of income is intimated to the income tax department through the filing of the return of income which cannot happen in the same financial year in which the income is earned.
Therefore, filing of ITR has been made mandatory ( subject to conditions) under Section 139 of the I-T Act, even if the TDS has been deducted and no further taxes are due. Further, there are provisions in the I-T Act to levy a penalty for not filing the ITR within the due date.
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Only those individuals with income below the exemption limit are not required to file the ITR even though they would have earned income during the financial year. The basic exemption limit varies as per age. For those below the age of 60, if the income is below Rs 2.5 lakh, the ITR need not be filed. Similarly, for those above age 60 and below 80, the basic exemption limit stands at Rs 3 lakh and for those above 80 years, the limit is Rs 5 lakh. However, it is important to note that if a taxpayer is taking the benefit of section 87A and using deductions under the I-T Act to reduce his taxable income but ends up paying Nil tax, filing of ITR is necessary in that case.
Filing of ITR helps at the time of claiming any refund in case any excess tax has been deducted by the employer. Also, ITR papers are considered the authentic source of income and can be used while applying for loans or visa. Further, if there are any losses incurred during the year, the tax provisions allow them to be carried forward and adjusted against income of future years, for which, filing of ITR of the relevant assessment years is necessary. The last date to file ITR is July 31 but for assessment year 2019-20 it has been extended to August 31, make sure you have filed it well within time.