Will you have to file Income Tax Returns if you earn less than Rs 5 lakh?

Will you have to file Income Tax Returns if you earn less than Rs 5 lakh?

Filing income tax return (ITR) is an important task for an individual, as it is mandatory for all Indians, including NRIs. The ITR can be filed in both online or offline modes. But earning individuals are still confused that is it mandatory for those who have an annual income below Rs 5 lakh can skip filing ITR or is it mandatory.

Budget 2019 presented by Nirmala Sitharaman in the Parliament, kept the personal income tax rates and slabs changes as announced in the Interim Budget 2019 unchanged. This meant that those having a taxable income of up to Rs 5 lakh will not have to pay tax for FY 2019-20.

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However, if you thought that having a taxable income of up to Rs 5 lakh meant bye-bye to the tax department think again. You can avail of the zero tax benefit announced in Budget 2019 but you still need to file your income tax return (ITR). The income tax exemption limit for all citizens below 60 years still remains at Rs 2.5 lakh and for senior citizens Rs 3 lakh.

As per Zee Business, those earning individuals who have an annual income above Rs 2.5 lakh but less than Rs 5 lakh, they must file their ITR otherwise they won’t be able to claim the income tax benefit up to Rs 5 lakh as announced in the union budget 2019. But tax and investment experts told Zee Business that those earning individuals who have business income, they must file their ITR even when their annual income is less than Rs 2.5 lakh.

“If your income is up to Rs 5 Lakhs you pay zero tax, but you must still file ITR. The income tax exemption is Rs 2.5 Lakhs a year for citizens below 60 years and Rs 3 Lakhs a year for senior citizens between 60 to 80 years. If you are earning anything above these limits, it’s compulsory to file ITR.” Sudheer said that an earning individual can claim a rebate on tax payable if the taxable income is up to Rs 5 Lakhs under Section 87A. If your income is up to Rs 5 Lakhs and you don’t file ITR, you will get a tax notice. Filing ITR is mandatory if your income is more than the basic exemption limit (Rs 2.5 Lakh a year) for citizens below 60,” CS Sudheer, CEO & Founder at IndianMoney.com told Zee Business.

Citing tax liability for taxpayers with net taxable income not exceeding Rs 5 Lakh is zero, CS Sudheer of IndiaMoney.com told Zee Business that three points important for every individual who has an annual income above Rs 2.5 lakh but below Rs 5 lakh. First, You must declare gross total income by filing ITR. (This is all income like interest income, salary and so on); secondly, You then claim tax exemption and tax deduction like HRA, standard deduction, Chapter V1A (Section 80C to U), home loan interest and so on; and After claiming all deductions under income tax laws from gross total income, if net taxable income doesn’t exceed Rs 5 Lakh, you get a rebate under Section 87A, Sudheer told Zee Business.

 

Source:- yahoo

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