Personal Income Tax Return
A country earns most of its revenue through income taxes. Income tax is the additional amount of money paid annually from the income to the government as per the rule of income tax law. The personal income tax return is the form that details the taxable income of an individual. This form is necessary to let know the federal government or tax authority if the individual is applicable for taxpaying or if a taxpayer is overpaying. This is the form where an individual assesses his annual income for the payment of income tax and in what sectors that individual may earn a return. Earning sources are to be cited with proper information in this form. Earned income, deduction, tax payable, tax paid and all other relative information have to be congruently added in this form.
Fundamentals filling in personal Income Tax Return
The legal right of government over any individual or organization’s annual income portion is said to be the personal income tax. Before payment of this income tax, a return has to be filed to show that if the individuals are capable enough to pay accurate income taxes with or without the benefit of a tax return. This Income tax return wants to know about some core income source and financial transaction over the year. Some key filling in the income tax return is given below:
This is the total income one made out of his job, selling properties, business, or any other investment during a year subject to income tax. Accounting methods vary in counting assessable income.
This is the income cutting off deductions and reliefs. The due that remains has to be added to this income.
This is the amount of money to be paid to the tax authority after calculating.
The amount of money paid as tax in the previous year.
The amount reduce in tax payment is tax relief. Most causes to claim this relief is disability relief, old age relief, child education relief, training cost, marriage relief, and aged dependency relief.
The excess amount of tax payments that are handled by the federal government. It works like a bonus or interest-free loan to the taxpayer.
Who must file a Personal Income Tax Return?
Tax is the most earned revenue of a country which helps to run country affairs smoothly. Every people who are a citizen of the country must participate in taxpaying. If an individual resides in a country enjoys his rights from the country and earns ransom money from his job, business, acquiring properties, or any other investment for a year he is bound to fill up a personal income tax return. The income amount is pre-decided by the federal government or tax authority of the country. Though it is opposed to any minor who is under 18 years old. Any citizen of the country having possession over a foreign property or assets on hand is to be file an income tax return. Also, the income tax return is necessary for the followings:
- Individual needs to file an income tax return to claim any losses over the year.
- Anyone who is applicable for a tax refund should file an income tax return.
- Even a liability being cleared by a working company, it is necessary to file an income tax return.
How to file
The procedure to file a personal income tax return is given below:
- Download income tax return files from websites. Also, a form can be collected from tax authorities.
- Fill up the form with the necessary information of income and gains. Misinformation may lead to taking legal suit by the authority.
- Attach necessary documents asked in the form relating income source, other incomes, and gains.
- Check before signing and submit to the right authority.
The consequence for not filing in time
Any person living in a country must file an income tax return. No man can file it whenever he wants except within its limited time. Primarily four months are given to every person living in the country eligible to pay tax for filing the income tax return. On failing to file in the given time taxpayer will be provided with another 60days extension by applying formally before the deadline expires. If someone fails to provide an income tax return on time and do not ask for any extensions the person shall face some consequence which is given below:
- The tax authority can charge a fraud case or criminal case and it is within the right of the authority to order punishment and bring the person to justice who doesn’t file a tax return.
- The income tax return is a necessary item for earning Tax Clearing Certificates (TCC).
- In any possible, to not filing a tax return in time the taxpayer shall receive interest debt with paying tax alongside punishment.