Common Misconceptions or Doubts with Salaried Persons About Income Tax

While conversing with many of my friends who are having job but do not belong to CA/taxation background I often come across few of the common misconceptions or doubts they have regarding filing of their income tax returns, I am sharing the same below in brief along with clarification based on best of my knowledge & experience, if anybody reading this article has any better opinion feel free to counter question in the comments section.

Misconceptions

Doubt / Misconception No.1:

“By filing the return of income I will definitely for sure get the refund of entire TDS which my employer has deducted from my salary”

Clarification:

Section 237 of the income tax act, 1961 deals with refund of excess tax paid by the assessee. If any person or assessee satisfies the assessing officer that the amount of the tax paid by him or paid by any person on his behalf (in this case- TDS) during any previous assessment year exceeds the amount with which he is properly chargeable under the act for that year, he is entitled to refund of excess amount paid.

 From the above para it is clear that TDS refund will be granted only if excess tax has been deducted. It is not true that refunds will granted compulsorily if you have filed your returns.

Doubt / Misconception No. 2:

“Filing of income tax returns is mandatory only if TDS has been deducted, no TDS implies no requirement to file the returns”

Clarification:

I would like to reproduce extract of section 139:

Section 139 (1) every person,—

(a)  being a company or a firm; or

(b)  being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this act during the previous year exceeded the maximum amount which is not chargeable to income-tax,

Shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed

The words “maximum amount which is not chargeable to income-tax” in clause (b) for F.Y .2019/2020   [AY 2020/2021] is Rs. 2,50,000/- p.a.

In some cases even though your total salary exceeds Rs. 2,50,000/- p.a , No TDS would have been deducted due implications of tax rebate under section 87A.

Therefore if your total salary for the year exceeds Rs. 2,50,000/- do get your returns filed on time even though there is no TDS deducted on the same, failure to file returns may attract penalty.

Doubt / Misconception No. 3:

“Can I file income tax returns for more than one financial year?”

Clarification:

Section 139(4) is reproduced below:

Any person  who has not furnished a return within the time allowed to him under sub-section (1), may furnish the return for any previous year at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.

 The words ” at any time before the end of the relevant assessment year”  implies that at any given point of time return of only one assessment year can be filed, hence is becomes necessary for us to file our returns on time, much better if it is filed before due date failing of which attracts fees under section 234F.

My personal opinion regarding how to go about to file your returns:

  • Salary earners should not hesitate in filing their income tax returns.
  • All they have to do is preserve your proof of tax deductions such as LIC, Mediclaim, PPF, school fees receipt of your children etc.
  • Preserve salary slips & bank statements.
  • Obtain form 16 [TDS certificate] from your employer.
  • Consult a CA along with all the documents stated above & ask them to file your returns.

Hope this article added to your knowledge cart, if you also have any of your friends with similar doubts do share this posts with them.

Suggestions & opinions are highly welcomed.

Author Bio

Qualification: CA in Job / Business
Company: A P & Company
Location: Mumbai, Maharashtra, IN
Member Since: 25 Jul 2020 | Total Posts: 2

My Published Posts

More Under Income Tax

7 Comments

  1. Shehzad Shaikh says:

    Sir,
    Your article is an eye opener for me.
    I am a salaried employee and my employer deduct TDS, therefore I was under impression that There is noo need to file Income Tax return, but after reading your article I hav decided to file my Income Tax return.
    Can I still file ITR for FY2018-19?
    If yes I need to file for FY2019-20 as well.
    Can you suggest someone who would do this for me, or Can u file it for me. If yes please share your contact details. I’ll contact you.
    Thank you very much Sir for spreading awareness regarding such issues.
    Please continue writing such articles.
    Thank you 🙏

  2. Vinod Yashwant Patil says:

    Even after giving details of tax saving to my employer he didi not show it and deducted extra tax. Now can I file return tax showing that saving as usual I file return on my own or I have to file return through CA only?

    1. Mohammed Anas Siddique says:

      You may go ahead with filing the return yourself provided you are well versed with provisions of income tax Act, however if you feel even a little hesitation do consult a CA because fiscals matters requires expertise.

  3. B agrawal says:

    Financial year is the year in which money is earned and next year is its assesment year.Like what we earned in April 19 to March20 pertains to FY 19-20 and assesment year (AY) 20-21. So the return will be filed in 2020 normally up to july20(tis year it has ee extended till Nov 20)

  4. Rikhab jain says:

    1. Most of salaried thinks if they will not their other income, they will not have any problem. 2 by filing returns they get loan easily. 3. Most of them do not prepare b/s whereas they should get prepared and should inform their car their investment and should give copies of their all the bank statement.

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

October 2020
M T W T F S S
 1234
567891011
12131415161718
19202122232425
262728293031