PAN Card ഉള്ളവരെല്ലാം Income Tax Return Submit ചെയ്യണോ? ആരൊക്കെ Tax അടയ്ക്കണം? MONEY MAGIC | N18V

Recent questions

• What is the Basic Exemption Limit?

  The Basic Exemption Limit refers to the threshold income level below which individuals are not required to pay income tax. In India, this limit varies based on age: for individuals below 60 years, it is set at ₹2.5 lakhs; for those aged between 60 and 80 years, it increases to ₹3 lakhs; and for individuals above 80 years, the limit is ₹5 lakhs. If an individual's total income exceeds these limits, they are mandated to file income tax returns. This system is designed to provide tax relief to lower-income groups and senior citizens, ensuring that only those with a higher income contribute to the tax system.

• How is income categorized for tax?

  Income is categorized into five distinct heads for tax calculation purposes. These categories include: 1) Salary, which encompasses wages and other compensation from employment; 2) Income from house property, primarily derived from rental income; 3) Capital Gains, which arise from the sale of assets such as land, shares, and jewelry; 4) Profits and Gains from business or profession, reflecting earnings from self-employment or business activities; and 5) Income from other sources, which includes earnings like bank interest and dividends. Each category is assessed to determine the total income, and if this total surpasses the Basic Exemption Limit, the individual is required to file a tax return.

• What happens if I file taxes late?

  Filing taxes late can result in penalties and interest charges. Specifically, if an individual files their income tax return after the deadline, they may incur a penalty of ₹1,000 if their income is below ₹5 lakhs. For those with an income exceeding ₹5 lakhs, the penalty increases to ₹5,000. Additionally, interest may be charged under Section 234 for any unpaid taxes, further increasing the financial burden on the taxpayer. In severe cases of willful non-filing, individuals may face prosecution under Section 276 CC, which can lead to imprisonment ranging from three months to two years, along with fines for tax liabilities exceeding ₹25 lakhs. This emphasizes the importance of timely tax filing to avoid legal and financial repercussions.

• When must I file my income tax return?

  Individuals are required to file their income tax returns if their total income exceeds the Basic Exemption Limit, which varies by age. Additionally, there are specific conditions that necessitate filing, such as if Tax Deducted at Source (TDS) has been deducted from their income, if expenses related to foreign trips exceed ₹2 lakhs, or if their total electricity bill for the year surpasses ₹1 lakh. Furthermore, individuals who wish to carry forward losses from asset transfers must also file their returns. These regulations ensure that all individuals with significant income or specific financial activities comply with tax obligations, thereby contributing to the overall tax system.

• What are the consequences of not filing taxes?

  Failing to file taxes can lead to serious consequences, including financial penalties and legal action. The penalties for late filing can be substantial, with fines of ₹1,000 for incomes below ₹5 lakhs and ₹5,000 for higher incomes. Moreover, interest charges under Section 234 may apply to any unpaid taxes, compounding the financial impact. In cases of willful non-filing, individuals may face prosecution under Section 276 CC, which can result in imprisonment for three months to two years, along with hefty fines for tax liabilities exceeding ₹25 lakhs. The government actively monitors transactions linked to Permanent Account Numbers (PAN) and Aadhaar, increasing the likelihood of receiving notices for non-compliance, thus highlighting the importance of adhering to tax filing requirements.