6 Things You May Not Know About Income Tax Refund
Why do we pay income tax?
Before discussing income tax refund, understanding the basics of income tax and the why paying it on time is important. The income tax that is collected is deployed towards building infrastructure and providing services that we avail every day. Filing income tax returns on time is the civic and moral duty of every citizen and paying the income tax that is due as per the income tax slabs that you fall under is essential for India's growth and progress.>
- Does everyone have to pay income tax?
As per the current tax slab, those with income up to Rs 2.5 lakhs do not have to pay any tax. Those with taxable income greater than that but under ₹ 5 lakhs, have to pay 5% income tax and 20%, if your income exceeds ₹ 5 lakhs but is under Rs 10 lakhs. If your taxable income exceeds ₹ 10 lakhs, you have to pay 30% income tax on the income that exceeds Rs10 lakhs.
- Who needs to file income tax returns?
If the gross total annual income, prior to the deductions allowed under 80C to 80U is under Rs2.5 lakhs, it is mandatory to file your income tax returns. This limit is Rs 3 lakhs for senior citizens. For any organization or firm, regardless of profit or loss, filing returns is mandatory. It is also compulsory to file your returns if you receive income from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust.
- What is Income Tax Refund?
Another critical reason why it is essential to file returns on a timely basis is if you want to know the status of income tax refund. If you have paid excess tax in the previous years or have paid tax deduced at source or TDS, but your taxable income is lower than the tax bracket you fall under, you can check the income tax refund status and have it transferred to your bank account. The online income tax refund status facility is not the only online tax related services you can avail.
- Can Income Tax returns be filed online?
It is possible to completely file your returns online and track the progress of your returns and refunds online. There are currently nine different forms available for online filing of income tax returns including ITR-1 to ITR-7 and also include the ITR-4S and ITR-V. In fact, ITR-3, 4,5,6,7 have to be mandatorily e-filed.
- By when do income tax returns need to be filed?
Online filing of returns needs to be done by July 31 or every financial year, preferably a month or two in advance so as to encounter lesser traffic on the official site operated by the Government of India. However, there are many private portals that assist you with filing of returns and charge a fee depending upon the services they offer.In case this deadline is missed for filing tax returns for the previous year, every additional day till July 31 increases the penal interest.
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