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.
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”
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”
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?”
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:
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.