Income Tax Returns/ Return of Income/ Return Filing and disclosures – Its importance

Yes, it is true that Individuals and HUFs are required to file their income tax return/ return of income only if their income before allowing deductions and exemptions exceeds the exemption limit. But we are of the strong opinion that even if where an assessee is not required to compulsorily file their return of income aka income tax returns, should file their return of income and also maintain their Income Tax file (Statements of assets and liabilities or Balance Sheet), as the same has many benefits, some of which are summarised as below: In case of salaried employees, they may acquire any property or make investments from the money received at the time of retirement or saved during the course of their employment, the income tax department may ask to explain the sources, and it becomes quite difficult to prove. Thus, they should look to maintain yearly balance sheets and advised to file their return of income; Further, wherein any loan is taken or advance given, the IT department seeks PAN number along with loan confirmations and even in some cases, statement of assets and liabilities or balance sheets during the course of the assessment proceedings is required to be submitted; These days the government has also become very strict and has made obligatory to mention PAN in respect various monetary transactions. Refer our previous note on same transactions where PAN is mandatory dated 11th February 2011. We receive gifts in cash and in kind on marriage as well as on other occasions. We tend to invest such money and during the course of time the same gets accumulated. At a later stage, when the accumulated amount becomes considerable, the income tax department may not accept the same and may question the sources. While making application for shares and debentures, as also investments above the certain amount, one is also required to mention the PAN and also for taking loans form various financial institutions, they regard PAN Number, balance sheets and regular filing of return of income/ tax returns as authentic proof of financial standing. Further, taxes may be deducted at source (TDS) from rent, interest, commission or any other income. Filing of return of income is obligatory to claim such refunds. God forbid, if search proceedings is carried out, it becomes much more difficult to prove the sources of asset creation if the return of income is not filed within the due date. The IT department may also treat the same as unaccounted and undisclosed money and may impose taxes, penal interest and penalty. In case of foreign travel, foreign embassy asks for substantiate financial proof and in normal parlance accepts regular filing of return of income/ income tax filing and also statement of assets and liabilities (Balance Sheet). Moreover, now it is mandatory to furnish PAN to the person deducting taxes and deductee shall indicate their PAN in all the correspondence, bill, vouchers and other documents; Thus, to summarise, it is of paramount importance to file regular income tax returns/ Tax returns disclosing all the financial transactions. Further, it also advisable to maintain proper statement of assets and liabilities (Balance Sheet) year on year, as it helps over a longer period of time. The IT department these days has many means to collect various information about various specified financial transactions of the assessees and it is advisable to disclose everything and relax, rather than worrying unnecessarily. which offers most comprehensive return filing service in India was launched to help individuals in their taxation matters. The sole object of is to make your life easy as our tax experts file your return of income. We just require your salary certificate/ other income details to file return of income. offers excellent tax support in addition to filing of return of income and comprehensive tax planning. At we do not put you at pain by asking to fill in long tax forms. You just need to fill in a form with basic details after attaching your salary certificate/ other income details, after which we take care to online tax return filing in most hassle free manner. So online income tax filing with taxmantra is obviously a better experience. Get in touch with us to file tax return online today and stay hassle free. Join us in pursuit of simplifying individual taxation! We welcome you to TaxMantra for easy online income tax filing / online return filing! Alok Patnia Founder and Director at

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