ITR filing: Assessment order, tax planning, actions defaulters face explained
Income Tax Returns filing: If you fall under the income tax slab, then it is a must for you to file income tax returns. Another important thing that you should keep in mind is tax planning. If you want to save on taxes, then the tax planning becomes an important tool for you. If you plan it well, you can claim exemption on the taxes levied on your hard-earned money.
"Tax planning is a strategy to save tax on income earned through various sources. Whatever we earn, be it an income from salary, business, profession or any other source of income, in most of the cases, we have to pay tax on it. As a result of that our earning is reduced by the extent of tax payment. There is provision claiming deduction under various sections of Income Tax act. By claiming a deduction as per law, a taxpayer can reduce his tax liability," said Pankaj Mathpal, Managing Director at Optima Money Managers.
However, when you file your ITR, you should be careful enough to present every detail to avoid mistakes. If a tax officer finds an anomaly in your tax data, he can issue an assessment order to verify the details.
"Income tax assessment order is an order passed by the Assessment Officer to verify the documents like computation of income, a book of accounts and bank statements etc," said Mathpal.
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If you fail to furnish the desired documents to the tax department, you may face various legal actions including a fine. A tax defaulter may face penalties under various sections of income tax act. This includes a fine up to Rs 10,000 in case of late filing and penalty at the rate of 200% of the tax sought to be evaded in case of under-reporting of the income.