Submitting Your Indian Income Tax Returns
A financial year in India spans from April 1st to March 31st of the subsequent year. Indian income tax returns are mandatory and must be filed for each financial year by the 31st of July following the end of that financial year. Individuals subject to a ‘tax audit’ under the provisions of the Income Tax Act, 1961, are required to file both a tax audit report and their income tax return by the 30th of September following the conclusion of the relevant financial year.
Our services extend to tax filing not only within India but also overseas, including the USA, Australia, and Singapore. We ensure that tax returns filed in both countries align regarding income sources, assets, and other disclosures.
Submitting tax returns promptly is a crucial step in complying with tax regulations. We strongly advise our clients to be proactive and adhere to these timelines to maintain compliance.
When filing tax returns in India, we consider the following aspects:
• Analyzing the various sources of income and calculating their tax liability in accordance with Indian tax laws.
• Scrutinizing claims for tax deductions.
• Reviewing declarations of assets and income.
• Ensuring proper documentation and record-keeping to anticipate potential assessments or notices from the Income Tax Department.
• Calculating exemptions and credits permitted under the Income Tax Act, in conjunction with provisions of Double Taxation Avoidance Agreements (DTAA) where applicable.
Why File Your Tax Return? Let’s consider the case of Mr. Rahul, an NRI with an NRO (Non-Resident Ordinary) account in India. The interest income on this account is subject to a tax rate of, let’s say, 30%. However, if Mr. Rahul files his tax return at the end of the year, he could be taxed at a lower rate, perhaps 10% after self-assessment.
To illustrate, if his income is Rs. 100, the bank would have deducted Rs. 30 as TDS (Tax Deducted at Source). But in reality, his tax liability should have been only Rs. 10. By filing his tax return, Mr. Rahul could potentially receive a refund of Rs. 20. Without this tax return, the tax department cannot process the refund.
In this scenario, it’s essential to recognize that filing tax returns is not merely an obligation; it can lead to significant tax savings.
