When it comes to taxes, misinformation spreads fast. Many people believe in income tax myths in India, here are Top 10 Income Tax Myths in India You Should Stop Believing, which leads to wrong decisions, missed refunds, and unexpected penalties. Therefore, it is important to know the truth and make informed choices.
1. Only High Earners Need to File Returns
Many assume only rich people must file returns. However, even if your income is below the taxable limit, filing helps you claim refunds and serves as official income proof.
2. Filing Is Only Required If You Have Tax Liability
This is untrue. In fact, the law requires filing in specific cases even without tax liability. For example, certain incomes or asset holdings trigger mandatory filing.
3. Salary Earners Don’t Need to File If TDS Is Deducted
Some think TDS means no filing. However, you must still submit your ITR to declare all income and claim eligible deductions.
4. Agricultural Income Is Fully Tax-Free
Agricultural income is exempt. Nevertheless, it can raise your tax rate through the inclusion method.
5. Gifts Are Never Taxable
This is partly wrong. Gifts above ₹50,000 from non-relatives are taxable under the Income Tax Act.
6. Older Citizens Don’t Need to Pay Taxes
Older citizens enjoy higher exemption limits. Still, taxable income beyond those limits attracts tax.
7. Late Filing Is Harmless
Filing late can lead to penalties and also damage your chances for loans or visas.
8. Only Cash Transactions Are Tracked
The tax department also tracks high-value digital transactions. Therefore, avoiding reporting them can cause trouble.
9. PAN Card Means Automatic Filing
Owning a PAN does not file your return for you. You must take that step yourself.
10. Refunds Are Always Automatic
Refunds arrive only when you file and verify your return.
File Income Tax Return – Here
Conclusion: Understanding and rejecting Top 10 Income Tax Myths in India You Should Stop Believing helps you comply with the law, prevent penalties, and claim all benefits you deserve. As a result, filing accurately and on time is always the smarter choice.