Why you should e-file tax returns for FY2015-16

In the past few years, a major part of the young Indian population has started to work at startups. Startups have created employment opportunities for a big chunk of this population and allowed them to not only fulfill their dreams, but also contribute to the Indian economy by way of paying income tax.

However, there is a big gap in the information about income taxes. The new generation doesn’t have enough knowledge on how to approach income tax return e-filing. Many don’t even know if they are supposed to e-file their returns or not. Well, that’s one subject of ambiguity that we’re here to solve.

Here are six reasons why you should e-file your income tax returns for FY2015-16 (AY2016-17), which is the period between 1 April 2015 and 31 March 2016:

If you earn more than Rs 2.5 lakh

You are required to e-file tax returns if you earned more than Rs 2.5 lakh in the financial year. This is before you have claimed tax-saving deductions. Even if there is no income tax that you are required to pay after claiming deductions, you still need to file your tax returns as long as your gross income is Rs 2.5 lakh or more. In case your income is more than Rs 5 lakh, you have to compulsorily e-file your returns.

If you want to get a tax refund

The salary you receive from your employer is paid after tax is deducted at source on it. When you file your income tax returns, you can get a refund on the excess TDS that is deducted on your behalf. Without your tax returns, the Income Tax Department wouldn’t be able to process a tax refund. Hence, you should file returns to get back the money that is owed to you.

If you want to avoid non-filing penalties

Yes, that’s true. The Income Tax Department can levy penalties if you fail to e-file your returns within the prescribed deadlines. The penalty can be as much as Rs 5,000, which is at the discretion of the assessing officer. Even your tax refund could get delayed if you don’t file on time.

If you want to apply for a visa

This is one of the many benefits of e-filing your income tax return, which is a required document at the time applying for a visa. Income tax returns will also be asked for when you apply for a loan. Tax returns are proof of your income and allows the application-granting institution to have adequate information about you.

If you want to avoid getting a notice

There are various sources from which the Income Tax Department can learn about your investments and expenses. If you’re carrying out financial transactions that the government needs to know about, you should report them properly by filing your tax returns. Why wait for a notice from the department to do what is required?

If you have foreign assets

Any Indian resident who has assets outside India or holds an account in a foreign bank is required to file his or her tax returns even if he or she doesn’t have taxable income. Foreign assets can be a house or a financial interest in an entity outside India.

The due date to e-file income tax returns for FY2015-16 is 31st July 2016. So make sure you e-file on time and do your bit for the country.