The income tax department in its advertisements has clearly mentioned that non-filing of returns or incorrect filing of income may result in penalty and prosecution and always encourages everyone to accurately submit their financial details to the department every year by filing returns.

A certain category of persons have been selected by the government for payment of taxes and they are compulsorily required to file their returns every year. Under section 2(31) of income tax act 1961, a person has been defined as under:

“Person” includes—

1. An individual,

2. A Hindu Undivided Family,

3. A Company,

4. A Firm,

5. An Association of Persons or a Body of Individuals, whether incorporated or not,

6. A Local Authority, and

7. Every artificial juridical person, not falling within any of the preceding sub-clauses;

The definition is inclusive and not exhaustive i.e. any other Person can also be included under the definition of Person under Income Tax Act.

The following persons are required to file their returns under section 139(1) of IT act: Any company regardless of whether it may be public, private, foreign or domestic

  • Any firm, which also includes Limited Liability Partnerships (LLP) as well as Unlimited Liability Partnerships
  • Any person provided that the sum of his or her taxable income for the financial year of relevance is more than the exemption limit allowed

Respective Due Dates for return filing for different assesses are:

July 31st – All persons who are not required to have an audit performed on their books of accounts are required to file their income tax returns by the 31st of July of every assessment year. This may include the following persons and entities:

  • A salaried person or employee
  • A self-employed person or professional
  • HUF or proprietorship firm
  • A consultant
  • A freelancer

September 30th – All persons who are required to or who are liable to have an audit performed on their books of accounts are required to file their income tax returns by the 30th of September of every assessment year. This may include the following persons and entities:

  • A company
  • A self-employed person or professional
  • A working partner employed with a firm who are required to have an audit performed on their books of accounts
  • A consultant/professional providing services exceeding limit required for audit

If a person or entity has filed income tax returns should an event arise wherein the individual or the entity is not under any compulsion to file a Mandatory Return, then the income tax returns filed by the person or the entity in question will be deemed to be a Voluntary Return. Voluntary Returns are also considered to be valid returns.

For those who are not required to file their returns as per applicable laws, filing their returns voluntarily may provide a lot of benefits that they may not be aware of. Not only it helps the government in keeping record of the earning population the country but it is also equally beneficial to the assessees filing them.

One should always file their income tax return on time. The government wants every individual irrespective of their age, income, case, gender, etc, to file their income tax return timely. Even if you don’t earn any income, you should file your NIL return.

It helps the government to check the population dynamics and allow everyone to reap economic benefits. Also, the government looks only for few handful of big companies to scrutinize and does not harass small and honest individual taxpayers. Usually, you will not get any notice or attention from the government unless you earn more than Rs. 1 crore or have entered into any transactions involving huge sums of money. So, the government wants everyone to freely file income tax return without any fear.

Filing of income tax return is more beneficial for the person filing it as :

  • You get your future loans processed easily if you have a filed income tax return as they usually require you to furnish last 3 years returns.
  • If one plans to start their business and need to fill a government tender or two for the same, they will need to show their tax return receipts of the previous five years.
  • If you do not file returns, you will not be able to carry forward capital losses (short-term or long-term), if any, in a financial year to be adjusted against capital gains made in the subsequent years.
  • You can get your future abroad travel plans confirmed with easy VISA processing by furnishing returns of last couple of years at the time of the visa interview.
  • You get benefits while choosing insurance for your life, health, medical or vehicle etc. as you can select a high value cover easily.
  • You get easy refund of tax deducted by your employers/payers etc through TDS reflecting in form 26AS.
  • For all sorts of financial transactions, ITR receipts will be the only proof of income and tax payment for the self-employed.
  • You get into the good books of the government and become a law-abiding citizen which helps in numerous ways throughout your life.
  • You get to verify your salary with what your company or employer shows to the government.
  • You fulfill your duties as a good citizen of the country.

Government has brought in various measures to help simplify the return filing process for the ordinary citizens of the country through progressive tax policy, efficient and effective tax administration and improved voluntary compliance

Though complexities in tax laws are regarded as one of the major impediments to voluntary compliance, a lot of effort has been made in the past decade to simplify the direct tax laws in the country. This effort needs to be continued in future also.

Promoting voluntary compliance is one of the prime concerns of IT Department. The challenge before the IT Department is to identify the barriers to voluntary compliance and take proactive steps to remove them by putting in place excellent public service delivery mechanism.

Continuous Cooperation from the law abiding citizens of the country is crucial for development of the nation as a whole and if provided India will definitely emerge as a superpower in the coming years before the world.

Author Bio

More Under Income Tax


  1. Rupesh malviya says:

    you are sharing great things which everybody wants to know….
    thanks for given us that information.
    i have an one question how you cleared all examination CA/CS/CMS.

Leave a Comment

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

Search Posts by Date

October 2021