Applicability and Benefits in filing of Income-Tax return | How to link PAN with Aadhaar in the new e-filing portal
It’s that time of year again!!
And if you think you are only required to file your income tax return if your employer has deducted TAX from your salary, then you are WRONG!
As per Income-tax rules, every individual has to file the return of income if his/her gross total income (i.e., your total accumulated income for the year BEFORE claiming any deductions, like tax-saving investments) exceeds the amount mentioned in the table below (depending on one’s age).
|Age of an individual||Basic Exemption limit (INR)|
|Below 60 years of age||2,50,000|
|Between 60 and 80 years of age (Senior Citizen)||3,00,000|
|80 years and above (Super Citizen)||5,00,000|
However, in certain cases even if your gross total income is below the exemption limit as mentioned above, you still have to file income tax return as mandated by the Income-tax Act 1961 amended via the Finance Bill, 2019. Following are the cases where tax filing is mandatory now: –
1) if a taxpayer has deposited Rs 1 crore or more in current account with a bank. This includes aggregate deposits during the year, and deposits can be via cash deposit or cheque, or online transfer.
2) if a taxpayer spent Rs 2 lakh or more on foreign travel (personal or business travel).
3) if a taxpayer paid an electricity bill of Rs 1 lakh or more during the financial year. This applies to both individual and commercial consumption, and whether it is your own or rented place.
Note: If you chose the new tax – regime, then the basic exemption limit will be Rs 2.5 lakh irrespective of the age of the individual i.e., whether the taxpayer is a senior/super senior citizen or not.
Filing income tax return (ITR) is a way of informing the government about the total income that you have earned during a particular financial year and that you have paid taxes on that income accordingly.
There are other benefits in filing ITR, as listed below: –
1. Helpful in faster processing of loans, visa application – ITRs serve as proof of income and it is a mandatory document when you apply for a loan, credit card, visa, etc.
2. Claim tax refund – In a case where tax has been deducted from your income, such as rental income, bank interest income, salary income, etc. then you need to file your ITR to claim the refund.
3. Carry forward of business loss – You cannot carry forward your loss from business if you don’t file your ITR on time.
4. Help you in buying a higher life cover – Not all insurance companies give you a higher insurance cover (50 lakhs or more) unless you have your returns filed. Past few years ITR is a mandatory document for some insurers.
5. Avoid penalty for non-filing – Most importantly, filing ITR after the due date or not filing can cost you interest and penalty. Interest, under Section 234A, will be 1% per month or part thereof until you file the ITR and the penalty has to be paid up to Rs 10,000 depending upon your income, under Section 234F.
1) For the current assessment year 2021-22 (i.e., the financial year 2020-21), the due date is 30th September 2021 for Individuals, HUF (whose books of accounts are not required to be audited).
2) It is mandatory to link your Aadhaar with Pan in the income-tax portal (the last date for this has been extended till 30th Sept 2021).
Step #1: Go to the Income Tax e-Filing portal, https://www.incometax.gov.in/iec/foportal/
Step #2: Scroll down the page and you will find the “Other Services” tab where you will find the option “Link Aadhaar”
Step #3: Click on Link Aadhaar, and it will take you to a new page. And you will be asked for details such as PAN number, Aadhaar number, Name as per Aadhaar, and your mobile number. Also, if only the year of birth is mentioned in your Aadhaar card (without date and month), then tick the check box asking ‘I have only year of birth in Aadhaar card’. Once you check the box, click on ‘Link Aadhaar’ to go ahead in the process
Step #4: Once you click on Link Aadhaar as per Step 3, it will take you to the next page where you will be asked to enter a 6-digit OTP which will be sent to your registered mobile number. Once you enter the OTP, click on the option that says “Validate.”
Step #5: Once you validate the OTP, you will receive a pop-up on the screen to notify you that a request to link your PAN to your Aadhaar has been submitted.
The author is a tax consultant and can be reached on 9886319171 / email@example.com for tax-filing work.