Income Tax Compliance refers to the process of ensuring that individuals, businesses, and organizations adhere to the tax laws and regulations set by the government. This includes the timely filing of tax returns, payment of taxes, maintenance of proper records, and adherence to tax deductions and exemptions.
Income tax compliance involves preparing and submitting accurate Income Tax Returns (ITR) based on income earned during a financial year, calculating the appropriate tax liabilities, and paying taxes due within the prescribed deadlines. It also includes ensuring that the tax is deducted at source (TDS) wherever applicable and complying with other regulatory requirements like advance tax payments.
For businesses, income tax compliance may also involve the preparation of financial statements, audit reports, and other related documentation, ensuring transparency and legal adherence. Non-compliance can lead to penalties, fines, and legal issues, so it is crucial for individuals and entities to fulfill their tax obligations.