FILE RETURNS IF INCOME EXCEEDS BASIC LIMIT

 

Do you have to file your tax return? Taxpayers hold many misconceptions about this.

Some think if their income is not taxable, they needn't file their return. Others believe that if tax has been deducted at source, their tax compliance is taken care of. The rules say that an individual has to file his tax return if the gross taxable income is above the basic exemption limit. This limit is `2.5 lakh for general tax payers, `3 lakh for senior citizens (above 60) and `5 lakh for very senior citizens (above 80). Remember, the gross income is computed after taking into account exemptions such as house rent, conveyance and other allowances, but before the deductions.

As the table shows, Taxpayer A does not have any tax liability because deductions will reduce his tax to zero. But he still has to file his tax return because his gross total income is above `2.5 lakh. Similarly, the very senior citizen is not obliged to file his return because his income is below the `5 lakh exemption limit. But he will need to file his return if he wants to claim refund of the TDS on his fixed deposits and bonds.

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