Under the Income Tax Act 1961, it is a legal obligation for every individual to fill the
income tax returns on a regular basis. Any individual whose gross income exceeds the
amount not chargeable to tax must file his/ her income tax returns. The law states that
an individual male below 65 years of age, whose annual income exceeds Rs 1,50,000 ,
is required to file the tax return. There is some relaxation in case of women and senior
citizens. A woman less than 65 years whose gross income is more than Rs 1,80,000
needs to file the tax return. For a senior citizens, the gross income has to exceed Rs
2,25,000 for them to be required to file the return
What If You Do Not Pay the Tax
The first reason why one should pay the taxes diligently is because it is obligatory
under the law. Another reason why one must pay the taxes regularly is to avoid the
risk of being charged heavy penalty. In case you do not file the return on due date ,
the Income Tax department has the right to charge you interest at 1% per month from
the due date to the date you actually file the return. The amount will be calculated on
the tax payable by you as reduced by Tax Deducted at source (TDS) on your income
and any advance tax paid by you. The same obligation applies to each year for which a
person has not filed the return. In case the tax has been paid but a return has not
been filed, then the income tax authorities may levy a penalty of Rs 5000 for the
same. If the tax returns are not filed, then under section 276 CC of the Income Tax
Act, one may be fined for dealing with prosecution. Some countries also take into
account the proof of filing your income tax returns while issuing visa to a person. The
Income Tax department is reassured of the financial stability of the institution if it has
filed its return without any interruption.
Annual Information Return
The Income Tax Department has issued a notice that if an individual has entered into
the transaction crossing a specified limit, he needs to declare the details of that
transaction in the form of an AIR. Earlier, people involved in major transactions did not
declare the information which lead to huge loss of revenue for the government. Thus,
the Income Tax Department has made it mandatory to specify the details of such
transactions in a separate return. If an individual has made cash deposits which sum
up to more than Rs 10 lac in a year at a particular bank, he needs to provide the
details of the same in AIR. Not only this, if his annual credit card bill exceeds Rs
2,00,000, then the details of the same must be mentioned in this return. The individual
also has to disclose the details of the transaction in shares worth more than Rs
1,00,000. The information about the purchase or sale of immovable property valued Rs
30,00,000 or more has to be cited in the AIR. Subscription to bonds and debentures of
a company or institution as well as of RBI worth more than Rs 5,00,000 needs to be
recorded in the AIR.
