Importance Of Filing Individual Tax Returns

By Author: Alice Coope
Total Articles: 213
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Income tax authorities help you to assess your income and accordingly clear of taxes. There are many people who believe that their individual tax return is a drop in the ocean for the income tax authorities. Hence, they sometime opt in form not filing their tax returns in order to save money. Hiding your individual tax return deliberately in order to minimize your tax liability is equivalent to tax evasion. Instances of tax evasion comprise not declaring interests received on fixed deposits in a bank or accepting income in cash.

A common perception that many people paying taxes through TDS have is that filing of returns is not essential. This is because the government’s main agenda is to make sure that the tax share is getting its due revenue. This is a misconception and it is important to know that it is a constitutional obligation to file in for tax returns. Hence, the job is not over only by paying taxes, you also need to file your individual tax returns.

Best practices for filing individual tax returns

As you partner with an expert tax planning agency or ...
... consultant you have access to some of the best practices for filing your tax return. They are:-

* Disclose the income from tax free dividend that you have received on long term capital gains on stocks in the stock market and mutual funds

* Disclose every investment and transaction that falls under Annual Information Return

* Include all the dependant family members’ income in the section of Specified person’s income. In case you have a refund from income tax department then you need to enter the cross check bank account number and MICR Code.

Impacts of Tax Evasion

Under the tax rules and regulates individuals that are found guilty of tax evasion will be charged a penalty. The penalty amount might just go up to three times higher than the initial tax amount. This means if the tax evasions amount is Rs.50, 000 and your account is under scrutiny, then you might just end up paying a penalty between Rs.50, 000 and Rs. 150,000 depending on your individual case.

Falling under the tax man’s scanner is definitely not a nice feeling. Hence, it makes better sense to comply with the income tax regulations and file your returns appropriately. However, as you seek advice from an expert tax planning consultant you can have access to legal and systematic methods for lessening your tax bill that makes filing tax returns easy for you.

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