You Have To Pay Income Tax Even If Your Salary Is Below Tax Limit, Know Why
Bhubaneswar: Yes, you have read rightly, you have to pay tax even if your taxable income is below the taxation limit. People whose declared income and expenses do not match, they are sure to be caught.
The government’s motive behind increasing the scope of filing returns is to catch taxpayers whose income and expenses are mismatched.
The New Conditions Are As Follows:
If your annual taxable income is less than 2.5 lakh rupees (for people up to the age of 60 years), 3 lakh rupees (60 to 79 years) or 5 lakh rupees (more than 80 years) but you are not entitled to any new condition if you come within the scope then you have to fill Income Tax Return.
However, the honest taxpayers need not worry at all.
Be Careful If You Do Any Of These:
- Under the seventh provision of Section 139 (1) of the Income Tax Act, 1961, if a taxpayer’s electricity bill is Rs 1 lakh or more during the year, if he has spent Rs 2 lakh or more on foreign travel, a or more than one crore rupees or more has been deposited in current account, then he will have to file IT return even if there is no taxable income.
- Foreign travel is however exempted.
If you have any property abroad, then you have to file ITR in any case, whether you have any income in India or not. If a citizen of the country has any property abroad or is a signing authority in any account located abroad, then he must compulsorily file ITR.
Foreign assets also include financial interest in any foreign company. It does not matter whether his income is taxable or not.
Several changes have been made in the tax forms of Assessment Year 2021:
- Under this, the taxpayer has to give declaration whether he is willing to file the return under the seventh provision of section 139 (1) of the Income Tax Act, 1961.
- Experts say that taxpayers who file ITR under these conditions will have to maintain documents to support their claims.
- The tax department may ask questions in this regard. However, no document is required while filing ITR. But the department can check the records of the last several years.
Income Tax Exemption:
- Tax exemption on capital gains will not be considered while computing the minimum tax deductible income. Previously if you were claiming exemption on capital gains tax was not required to file ITR, provided their total income does not exceed taxable income.
- But after the Finance Act, 2019, now everyone is required to calculate the edge limit or basic exemption limit without the exemption benefit. In this case, if your income is more than the exemption limit before claiming exemption, then you have to fill ITR.
For example, if your total income is Rs 2 lakh and you have a capital gain of Rs 3 lakh from selling a house, which you have invested to get a discount. In such a situation, you have to pay ITR because your total income is Rs 5 lakh. This was not the case until last year.