There are a number of misconceptions people posses about TDS and file income tax return with mistakes. The first essential thing to know for any non-governmental employee is the conception of TDS. It is Tax Deducted at Source which the employers cut from the employee’s salary if that exceeds the threshold limit. Also, TDS can be deducted from the bank interest payment, rent payment, commission payment and consultation fees. The taken TDS goes to the Government while deductee file income tax return.
Now talking about the misconception regarding TDS, the first and most important one is “income tax filing is not required if TDS has been deducted”. This is a wrong conception which can lead you to pay a penalty at some point. Cutting-off TDS is mandatory for the employers and banks while making a payment, but it does not limit your responsibility to file income tax return. IT returns are subjected to the total amount you earn in a financial year, irrespective of the fact that if TDS has been taken out of your income or not.
Another misconception need to mention is “deducted TDS does not require to be mentioned in the Form 26AS to take credit for it”. It is very important that you mention all the deductions correctly in your Form 26AS to get the credit when you file income tax return.
The next thing, people have a misconception about is “TDS deducted on interest income, don’t need to be reported in the return”. Many people are not aware of the fact that bank savings and interest earn my them are subjected to TDS and that need to be mentioned clearly in the tax return forms. You must report such TDS deductions during ITR filing to get the eligible credits.
The conclusion is if your income exceeds the limit of INR 2,50,000 per annum then you need to file income tax return regardless of the fact if you have paid TDS or not.
Also Read : Get To Know If ITR-7 Is The Right Form For You To File Income Tax Return
Now talking about the misconception regarding TDS, the first and most important one is “income tax filing is not required if TDS has been deducted”. This is a wrong conception which can lead you to pay a penalty at some point. Cutting-off TDS is mandatory for the employers and banks while making a payment, but it does not limit your responsibility to file income tax return. IT returns are subjected to the total amount you earn in a financial year, irrespective of the fact that if TDS has been taken out of your income or not.
The next thing, people have a misconception about is “TDS deducted on interest income, don’t need to be reported in the return”. Many people are not aware of the fact that bank savings and interest earn my them are subjected to TDS and that need to be mentioned clearly in the tax return forms. You must report such TDS deductions during ITR filing to get the eligible credits.
The conclusion is if your income exceeds the limit of INR 2,50,000 per annum then you need to file income tax return regardless of the fact if you have paid TDS or not.
Also Read : Get To Know If ITR-7 Is The Right Form For You To File Income Tax Return
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