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ITR must for Income less than 5 laks

Tax

As per the Circular released in July 2013, the CBDT has clarified that the exemption from filing Income Tax Returns for Salaried individuals earning less than Rs 5,00,000 (Rupees Five Laks) was applicable only for the FY 10-11 and FY 11-12 and in not applicable for ensuing Financial Years.

Hence even if your income is less than Rs 5,00,000 you will need to file your Income Tax Returns.

Moreover, it has been made mandatory for individuals having an income of more than Rs 5,00,000 to file e-returns.

The exemption to file IT Returns for Salaried individual with income less than Rs 5 laks pa was provided by Mr Pranab Mukherjee, in view that the chances of evasion of taxes was very negligible with this category and it would ease the burden on the tax department as either way this category did not pay much in taxes to the government compared to individuals earning higher.

As per the changing and dynamic tax landscape and with more resources beneath the sails of the CBDT and the Income Tax Department, compliance has become a major objective of the Government. To ensure meeting of tax related revenue targets and weed out evasion, the ITD has sent more than 12 lak Income Tax Notices in the past 12 months to non-filers.

We strongly advise our clients to keep their books and IT Returns up-to date and file their tax returns religiously every year, even if they do-not have any taxable income. We advise this because in case you get an IT Notice, this becomes unnecessary anxiety for yourself and family members, harassment in terms of time and is a more expensive affair as you will need to pay for Lawyer (representation) fee other than normal accounting fee which will be much more than just filing your returns regularly year on year. There may be other incidental expenses also.

It is also important to appoint a professional and qualified tax consultant rather than visiting your tax ‘agent’, who may have become a tax ‘agent’ as a part-time revenue generating profession and may not have the required experience, knowledge and qualification to steer you clear of any tax related issues. Visiting a qualified and experienced professional may cost you a little more than a ‘agent’ however in the long term it would work out more economical for you as 1 Notice due to non-professional advice and handling by an ‘agent’ can become a real drain on your finances. Off course you would have heard about the old adage, “You pay peanuts, you will get monkeys”.

Filing IT Returns just about takes a couple of minutes wherein you can avail of a fully assisted tax filing services which is coupled with accounting and advisory and mail your documents to your Tax Consultant, wherein the Consultant will take care of all Accounting, Computation, Filing and other Compliances throughout the year.

Work towards Notice free environment for enhanced peace of mind and better financials and compliance.

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