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Government has made it official that an individual who earns income below Rs. 5 Lakhs need not file their Income Tax Return. However, don’t jump with joy because most will still have to file the returns due to the conditions IT Department has attached with this rider.
In this article Taxmantra will help you in understanding the situation better and make you aware of all the condition related to it and the people to whom such exemption limit does not apply. Further, we will also brief you on the benefits of filing Income Tax Returns and why it is important to file your Income Tax Returns.
People are aware of the fact that government has granted exemption to individuals from filing their returns if they earn a salary income below Rs. 5 Lakhs. But they are unaware of the conditions relating to it and to whom it does not apply.
The following class of persons cannot avail such exemption:-
1.) An individual who has multiple Form 16 (has shifted from one employment to another)
2.) An individual who earns income other than income from salary and savings bank interest
3.) An individual whose total Tax Liability has not been paid through Tax Deducted at Source (TDS) and has some amount of Tax Payable
4.) An individual who has some amount of refund due to excess deduction of Tax Deducted at Source (TDS)
5.) An individual whose interest income on savings bank account is above Rs. 10,000.
Further, the following class of people can only avail such exemption limit:-
a.) An Individual whose source of income is Salary income and Tax has been deducted on such income through TDS and there is no amount of Tax Payable or Refund.
b.) An individual who earns interest income on savings bank account and such income is below Rs. 10,000.
Common people are confused over the issues relating to return filing. Their main concern is regarding the exempted limit of return filing. As we are aware of the fact that Government has exempted individuals from filing return those whose salary income is less than Rs. 5 Lakhs.
But in this article Taxmantra is advising you to always file your return even if your salary income is less than Rs. 5 Lakhs.
Benefits of filing Tax return even if the salary income is less than Rs. 5 Lakhs
1.) Form 16 does not stand as a valid proof of your income. Further, ITRV received from the Income Tax Department stands as a valid proof of income and is accepted everywhere.
2.) In case you want to apply for a Loan (Housing Loan, Car Loan, Personal Loan, etc.,), the Financial Institute such as bank will ask for 3 Years ITRV as a proof of financial stability which can be maintained only by filing your Income Tax Returns every year.
3.) In case you want to make a Visa application it is necessary to file your Income Tax Return.
4.) It is always advisable to maintain a Financial record of Income in the form of ITRV to stay Hassle Free and be able to present such record whenever needed.
Thus, considering the above points it can be summed up that one should file return even if salary is less than Rs. 5 Lakhs.