The taxable threshold, also known as the basic exemption limit, refers to the minimum income level below which individuals are not liable to pay income tax. For those under 60, the basic exemption level for the 2022–23 fiscal year is Rs 2.5 lakh.
Filing Taxes Below the Taxable Threshold
While filing taxes is not mandatory if your income falls below the taxable threshold, there are situations where you may choose to file voluntarily. Here's why:
- If you have had taxes deducted at source, such as through your salary, and your total income is below the taxable threshold, you can submit your income tax return to claim a refund. This occurs when the taxes withheld exceed your actual tax liability.
- Filing taxes, even with a lower income, can help build your financial history. Having a record of filing tax returns can be beneficial for various purposes, including applying for loans, visas, or scholarships in the future.
- Filing taxes voluntarily demonstrates your commitment to complying with legal obligations and being a responsible citizen. It showcases your willingness to contribute to the nation's development.
- Certain tax benefits, deductions, and exemptions are available even if your income is below the taxable threshold. By filing taxes, you can utilize these provisions to reduce the burden of your tax liability and optimize your financial planning.
Forms and Due Dates
If you choose to file taxes voluntarily, you can use the appropriate income tax return form based on your income sources and complexity. For example, Form ITR-1 (Sahaj) is commonly used by individuals with income below the taxable threshold.Typically, July 31st of the assessment year is the deadline for filing income tax returns.
If your income is below the taxable level, filing taxes is not required. However, there are several reasons why you may choose to file taxes voluntarily, such as claiming tax refunds, establishing a financial history, complying with legal requirements, and availing tax benefits.
Look up more articles here for a smooth first time tax-filing process. All the best!
