One of the ways to live a peaceful life is to remain tax compliant in order to avoid getting tax notices and keeping the taxmen at bay.
One of the ways to live a peaceful life is to remain tax compliant in order to avoid getting tax notices and keeping the taxmen at bay. For this, you should pay all the tax payables on time and file the necessary returns to inform the tax authorities about the tax deposits.
Although, the tax exemption limit is up to Rs 2.5 lakh for individuals below 60 years of age, benefits of various deductions may be availed under the Old Income Tax Regime to reduce the tax payable on income above the exemption slab. Some of the most useful deductions currently available under various sections of the Income Tax Act are up to Rs 1.5 lakh u/s 80C, up to Rs 50,000 u/s 80CCD(1B), up to Rs 75,000 u/s 80D, up to Rs 10,000 u/s 80TTA (up to Rs 50,000 for senior citizens u/s 80TTB).
Moreover, tax rebates are available u/s 87A on taxable income up to Rs 5 lakh. So, by availing various deductions, if an individual can bring down the taxable income below Rs 5 lakh, he/she may end up paying no tax by claiming the rebate at the time of filing his/her Income Tax Return (ITR).
On the other hand, in case of taxable income of over Rs 5 lakh, a person may have to pay interest and penalties on tax payable, if the taxes are not paid in advance as per the schedule of payment of advance taxes. So, in case of the incomes, where no or less tax is deducted at source (TDS) – like interest on savings bank account, post office deposits, capital gains, etc – an individual needs to calculate and pay tax proactively.
Dr. Suresh Surana, Founder, RSM India explains, the following indicative steps and checks a taxpayer may resort to, in order to stay tax compliant in the new year and beyond:
Section 208 requires every person whose estimated tax liability for the year is Rs. 10,000 or more to pay their tax in advance, in the form of “advance tax”. However, a resident senior citizen (i.e., an individual of the age of 60 years or above during the relevant financial year) not having any income from business or profession is not liable to pay advance tax. Accordingly, the taxpayers need to pay such advance tax on or before the following mentioned due dates as given below.
For taxpayers who have opted for presumptive taxation scheme under section 44AD & section 44ADA, the due date for such taxpayers would be payment of 100% of advance tax liability on or before 15th March of the financial year. Failure to pay advance tax may entail interest implications u/s 234B and 234C of the IT Act.
Every taxpayer should furnish their income tax return within the time specified u/s 139(1) of the IT Act as follows:
Failure to furnish the tax return within the due date specified above would not only subject the taxpayer to interest and penal consequences but would also restrict carry forward of losses (except house property loss) and certain specified deductions.
The taxpayers need to keep a tab on the notices / communications issued to them by the Income tax authorities from time to time and furnish the necessary response along with documents, if required. Such notices can be accessed by the taxpayers from their income tax portal. Failure to furnish may subject the assessee to unnecessary hardship by way of imposition of penalty. Further, in case of non-response by the taxpayer, the revenue authorities have the power to continue their assessment to the best of their judgement.
Form 15G and Form 15H are self declaratory forms which are generally provided by the taxpayers to the tax deductors such as Banks for the purpose of claiming receipt without subjecting them to withholding tax or TDS. Form 15G is applicable for individual taxpayers below 60 years of age whereas Form 15H is applicable for taxpayers aged 60 years or more provided the tax on estimated total income is nil. Such form ideally needs to be submitted at the beginning of the financial year so as to ensure no withholding of TDS.
Further, taxpayers also need to collect copies of TDS certificates from their tax deductors on or before the date of furnishing their returns so as to enable them to consider the details as mentioned in such TDS certificates in their income tax return.
While furnishing their income tax returns, the taxpayers need to cross verify the data as mentioned in Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) summary along with the data in the income tax return. Such cross verification of data would enable the taxpayer to update any information which was missed out in the return.
Source: https://www.financialexpress.com/money/income-tax/income-tax-how-to-stay-tax-compliant-in-2023-and-beyond/2924906/
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