Should salaried individuals file tax return without taxable income

Many salaried persons are under the impression that if full tax has already been deducted by employer from their salary then they are not required to file their income tax returns.

In this post, we will discuss why a salaried individual is required to file his income tax return in cases where full tax has already been deducted from salary by his employer.

As per the present tax law, a salaried person is required to file his income tax return if gross total income exceeds the basic exemption limit.

Basic exemption limit applicable for financial year 2015-2016 and 2016-2017 is Rs. 2.50 lakh for taxpayers who are below the age of 60 years. This limit is Rs 3 lakh for senior citizens who are more than 60 years old but less than 80 years old and Rs 5 lakh for super senior citizens who are more than 80 years old.

For salaried individuals, basic exemption limit is the income calculated before allowing any tax deduction available under chapter VIA i.e. under various sections like Sections 80 C, 80 CCC, 80 CCD, 80D, 80 DD, 80 DDB, 80E, 80G, 80 GGA, 80 U and 80 TTA etc.

In certain cases, it may happen that income after allowing various deductions under chapter VIA may fall below the basic exemption limit. Due to this issue, your employer might not have deducted tax from your salary. But, in this type of cases, you are still required to file your income tax return if income before tax deduction or TDS is more than the allowed basic exemption limit.

In certain other cases a salaried person who is resident in India is also required to file his income tax return. Here is the list;

• Having any asset outside India, even if there is no income from that asset.
• The person is an authorized signatory for any account located outside India.
• Having investments in shares, bonds or mutual fund units of foreign companies.
• Carry forward and set off losses (for instance losses from stock market investments)

Salaried individual is also required to file his income tax return if he has to claim refund for excess tax deducted at source.

So to be on the right side of law, you as a salaried individual required filing income tax return if income exceeds basic exemption limit irrespective of the fact that tax has already been deducted by your employer.

With the online facilities and services available at Income Tax department’s e-filing website, I-T filing has become an easy thing. Salaried individual can file IT returns online with or without taking any help from accountants or chartered accountants (CAs).

For filing I-T returns online, you need to have your Form 16 ready with you. We suggest you to match form 16 and 26AS before filing your tax return.

The biggest benefit of filing income tax return is that it helps you apply for a home loan, car loan, personal loan or visa to assess your credit worthiness.

Under section 271F of Income tax act 1961, the assessing officer may levy a penalty of Rs 5,000 when you have not filed your tax return by the due date.