Common Misconceptions in Filing ITR — Explained

This is the most common misconception among the employees. Employer will deduct the TDS on the employee's salaries and deposit the same to Government.

Generally, most of the employees will think that they are not required to file Income Tax return as the employer has already deducted TDS. But it is the responsibility of the employee to file the Income Tax return along with income otherthan the salary.

If employee don't file the Income Tax return, it is considered as not filed and employee is responsible for any future notices.

Most business people feel that they are not required to file Income Tax Return as they are having very less profits, But this is wrong. Income Tax return needs to be filed on turnover basis but not on profit basis.

Also filing Income tax returns regularly helps the business in establishing financial identity, getting loans etc.

Most of the people sells the property for a loss or nominal gain and thinks that they are not required to file Income Tax returns as they have not gained much. But it is wrong.

If you have sold a property, you need to file Income Tax return irrespective of gain or loss. You can carry forward the loss upto 8 years if you have filed income tax return in due date. Filing Income Tax returns helps in minimizing the chances of tax notices.

If you don't have any income in India, it is optional to file tax returns in India. But it is recommended to file your income tax returns in India as it establishes the fact that you are an NRI and you were earning outside India which is not taxable in India.

This is also one of the popular misconceptions among the taxpayers who do trading in shares and F&O. Most of the people think that they have not earned any profits but suffered losses and they are not required to show in Income Tax returns.

It is mandatory for the taxpayers to show all the trading activity in Income Tax returns even though they have incurred losses.

Filing income tax returns with in due dates helps the taxpayers to carry forward the losses and minimizing the chances of notices.

Gifts from relatives is exempt from Income tax. But these needs to be disclosed while filing income tax returns. If not disclosed, it will lead into notices from Income Tax Department

If you are doing frequent foreign travel, you are definitely required to file Income tax return and disclose how much is the amount spent on your foreign travel in Income Tax return. If someone is spending so much of amount on foreign travel without having source of income, they need to disclose the source of income. There are high chances of notices if you have not filed income tax returns after spending amount on foreign travel.

You are required to file income tax return even though bank is deducting TDS because bank will deduct only 10% TDS and you are required to file income tax return and disclose all your income and pay the applicable taxes or claim refund whatever applicable.

Because while deducting TDS, banks will consider only your FD interest. They will not consider Savings bank interest. Hence you are required to file income tax return.

Depositing cash in bank account is a specified financial transaction. If you are depositing the cash into bank account more than the specified limit, you are required to file income tax return.

The basic exemption limit for filing income tax returns is only Rs 2.5 lakhs/3 lakhs. You are required to file your income tax returns once your income exceeds Rs 2.5 lakhs /3 lakhs even though you are not required to pay taxes

If you are an NRI and investing in India, you are required to file income tax returns in India as it establishes your residential status and source of investment. Non filing of income tax returns will lead into the notices from Income tax department.

GST is a indirect tax. GST is collected from customers and paid to Government. Where as Income tax is direct tax payable on your income. It is mandatory to file your income tax returns irrespective of whether you are paying GST or not.

You are required to file your income tax returns once your income exceeds Rs 2.5 lakhs or 3 lakhs irrespective of whether the employer has deducted the TDS or not. Non deduction of TDS should not be a reason for not filing income tax returns.

You are required to file income tax returns even though you are student because you are earning as freelancer. You are required to file your income tax return if your income exceeds threshold

You are required to file income tax returns when you are director of a company even though you are not withdrawing any income from company

When you have foreign assets, you are mandatorily required to file your income tax return in India even though you don't have any income in India or foreign. Non filing of income tax returns leads in notices

You are required to file income tax returns in India when you are only mining the VDA even though you don't have any income. Mining itself is the source of income and you are required to file income tax returns

The taxation of sale of agriculture land depends on type of agriculture land i.e., Rural or urban Agriculture land. Hence it is mandatory to file income tax returns when ever you sell an agriculture land whether it is rural or urban