Whether you’re an entrepreneur who has started his own business or you’re a salaried employee working in a firm you might get confused if you fall near or slightly above the income tax exemption limit owing to the fact whether you need to file the income tax return or not.
The government makes it mandatory for each of the individual earning a specific amount of annual income to file an income tax return at a predetermined due date.
If a person fails to pay the income tax, then he can be charged with huge penalities by the Income Tax Department. But a lot of people fail to understand whether they come under the category to file an income tax return or not if they fall close to or slightly above the tax exemption limit.
You need to understand the correct stature because it not only is a sign of a responsible citizen but also garners you with lots of benefits.
Those who have still not paid their income tax for the year 2018-2019 should definitely pay the tax as the income tax return filing deadline is quite close and after 31 st July 2019 the ITR filers will have to give late fine.
A lot of salaried and employed individuals have been mandated to pay the income tax by the government according to their age bracket and earnings.
If you’re an Indian citizen below sixty years of age and your total income exceeds the tax exemption limit of 2.5 lakh, then you’ll have to file an income tax return.
For senior citizens (between the age of 60 years and 80 years) and super senior citizens (above the age of 80 years), the income tax exemption limit has been set at Rs 3 lakh and Rs 5 lakh, respectively.
Recently, the Finance Minister Piyush Goyal introduced in the interim Budget 2019-20 the full income tax rebate for the individuals earning up to five lakh. Therefore if you’re earning is five lakh rupees per year then your tax liability becomes zero. These segment of people, however, are not exempted from filing the income tax return.
The people who’ll withdraw more than one crore from their current bank account or will spend more than two lakh for foreign travel or will pay an electricity bill more than two lakh have also been mandated to pay income tax in the fiscal year 2019-20 irrespective of their income.