Each taxpayer must voluntarily and compelledly file an income return within the allotted time frame, as informed by the Central Government; failure to do so may result in penalties and interest on the amount owed. The Income Tax Act’s Sections 139(1) through (9) address the Return of Income’s provisions.
To simplify the loan application process
When applying for a loan—whether for a home, business, property, or any other kind—a person, firm, company, or category as defined by the aforementioned laws will frequently be required to provide proof of income and annexures attesting to two or three years of employment before the banker or lender can approve the loan. in order for everyone to be required to file an income return.
For TDS reimbursements
After TDS has been subtracted from an individual’s income, they can file an income return to alter the amount deducted from their tax bill or claim a refund.
There can be forward losses
By filing an income return, anyone who has incurred losses may choose to carry those losses over and deduct them from their income for the following fiscal year under the headings of capital gains, house profits, business, or profession.
Applying for a credit card or visa is possible.
A return of income is the required document for anyone seeking for a credit card or a visa that requires travel abroad.
In the case of a weapon license
Before the relevant authority, anyone wishing to apply for an arms license must present a return of income. You will therefore have to file an income return.
For submitting a request for a government contract
Any individual who must accept a contract before the federal or state governments is required to furnish proof of income.
It supports the development of nations.
Individual taxes contribute to the development of our country. The tax revenue is used by the government to fund infrastructure projects and other forms of development.
With the exception of the aforementioned, everyone is required by the seventh proviso of the aforementioned clause to file an income return, which looks like this:
Who is required by law to file income tax returns?
Under Section 139’s eighth proviso, filing a return of income is required in certain situations.
i) If money is placed in one or more current accounts held with a financial institution or cooperative bank in an amount that exceeds rupee one crore, either in full or in part; or
ii) Has spent more than two lakh rupees in total, individually or in combination, on travel expenses to a foreign nation; or
iii) Has paid for the purchase of power in an amount or an amount total exceeding one lakh rupees; or
Additionally, list any additional requirements that may be specified.
In the case of an individual or HUF, the deadline for filing the income return is often July 31st. If compliance is not achieved within the government-mandated time frame, legal penalties and interest provisions will apply.