Recently Honourable Prime Minister Narendra Modi pointed out in his speech that in India there is a total population of 130 crores out of which only 1.5 crores of population file the return which is 1.15% approx to the total population of India, and rightly said by PM Narendra Modi that we need to increase the Income-tax filing base to cop up with the current situation
Now the question is how the government will do so? Right? But there is a possibility of increasing the income tax filing return and on which income tax department is working forward. Yet we need to think with a point of view of every people's mindset about income tax. Since in India, many illiterate people earn so much money which is above the exempted limit (2,50,000) and are unaware or don't know how to file the income tax return or in case they are farmers, their income is exempt under income tax Act, 1961. So they fill that they don't need to file an income tax return.
Here also there are few problems as follows:
Why illiterate people's don't feel worth filing an income tax return? Because if they need to, they have to go the professional, and they will going to charge fees to do so. Secondly, if their income is under exempt income slap then also they have to pay the fees, to the professional, it's as good as paying tax only without falling into the taxable slab. Hence, they think it's not worthwhile to file the income tax return.
In case people are encouraged themself to file the income tax return. Then the problem is with the complexity of income tax return format and provision of income-tax Act, 1961 to disclose correct income. Secondly, in case they managed to put all the effort in filing the return themself nevertheless, in that case, they worry about the mistakes they might have made while filing the income tax return, the department will issue notice and complication starts all over. Hence, due to fear of department notice few people don't file the return. Because they know if they don't file an income tax return, they will not come into departments eyes'.
There is another group of people who files income tax return once and get stuck there not filing income tax returns for years just because they are afraid of the interest and penalties will levy by the department. Secondly, there also few people who file the income tax returns for the first year then get behind for the second year, that time they stop filing the income tax returns at all for the next year (3rd year) just because they think if I file an income tax return for next year, they will levy interest and penalties for last year's;
Some people think that if I file and if I pay taxes on y income it will only fill the pockets of politicians and not into the welfare of the country. To some extent they are correct but if all people think so there well no people who will willingly pay taxes. Yet that's not the case always. Otherwise, our country would be in a miserable condition today. I would ask these people a question that is "from where this all roads and other infrastructure in our country?" Just because of 1.15% of people in our country.
Yet we can go on and on a case for why people don't file there income tax returns.
As I said previously early in this article that the income tax department is consistently working towards simplifying the income tax law to increase, encourage and educate more people to file their income tax returns. Keeping that in view Honourable Finance Minister Nirmala Sitharaman in the budget speech for the Financial year, 2020-21 (The assessment year 2021-22) reduce the tax rates and increase slaps to and made income tax return filing easy as now a taxpayer opts for this new scheme he has to calculate total income and calculate his tax liability according to slap rate applicable and file the income tax return
Just an opinion request all of you to file the income tax returns even if you are not falling in income taxability slabs, file a Nil return.
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