Friday, June 15, 2012

Income Tax Returns Filing: Why You Must Do It

This is the time of the year when your employer starts sending out your form 16 and emails about filing your income tax. The question a lot of people ask is 'My tax is deducted at source by my employer. Why should I go through this process of filing income tax return?'. Other common excuses which come up are:

1. Government has stated that individuals who earn below Rs 5 lakh income need not file income tax returns
2. The deadline for filing tax returns is far away, why bother now
3. My employer has already paid my tax and I have no other income, why should I file for income tax returns
4. I have anyway missed the deadline for filing tax returns (July 31), so now it does not matter whether I file the returns or not.

Though these are common perceptions, nothing could be further away from the truth.