Numerous individuals in our country believe that if their salary undergoes TDS (Tax Deducted at Source), they are exempt from filing an Income Tax Return. However, it is crucial to understand that filing an Income Tax Return and paying income tax are distinct obligations. In this article, we will provide detailed information on the legal position of salaried employees and under what circumstances they are required to file an Income Tax Return.
Salaried individuals earning taxable income, which exceeds the exemption limit, must mandatorily file an Income Tax Return in India. For the Financial Year 2018-19, the exemption limit stands at Rs. 2.5 Lakh, while for the Financial Year 2019-20, it is Rs. 5 Lakh.
Tax Refund: If your tax liability is lower than the taxes deducted, filing an Income Tax Return becomes crucial to claim an Income Tax Refund. It is only through the filing of an Income Tax Return that you can receive the refund owed to you.
Visa Applications: When applying for a visa to travel abroad, it is essential to provide details of your Income Tax Return for the past three years. This requirement demonstrates your financial transparency and enhances your chances of acquiring the visa.
Home Loan Applications: If you plan to apply for a home loan, it is mandatory to provide the details of your Income Tax Return from the previous three years. This serves as proof of your income and strengthens your eligibility for obtaining the loan.
Now that you comprehend the significance of filing an Income Tax Return, it is recommended that taxpayers, even those without taxable income, voluntarily file their Income Tax Return. Doing so allows you to avail the aforementioned benefits and ensures you stay ahead in financial matters.