Why do we have to declare debts on Income Tax?
Understand why it is necessary to declare debts on Income Tax and how to do it
Announcements
Declaring debts on Income Tax, depending on the amount, is a mandatory procedure.
For this reason, in today's article, we will tell you when you should report your debts in your tax return and what the procedure is for doing so.
Read on to find out more.
What is Income Tax?
Income Tax, as the name suggests, is a federal tax on income.
Its main purpose is to inform the Federal Revenue Service about the income you had in the previous year and your wealth growth.
Taxation is valid for both individuals and legal entities. For this reason, it is divided into two categories: Personal Income Tax (IRPF) and Corporate Income Tax (IRPJ).
In 2022, anyone who received taxable income in 2021 in amounts greater than R$28,559.70, or earned more than R$40,000 in exempt, non-taxable or source-taxed income in the year, needed to declare Income Tax.
How to declare debts on Income Tax?
Debts with values above R$1,000 must be reported.
Furthermore, loans and financing that also exceed this amount must be declared on your income tax return.
Debts with values equal to or below R$1,000,400 do not need to be informed.
But to help you understand better, we will separate the debts into some categories and explain how to fill out each one.
Debts with financial institutions
If the debt is with a bank, such as a personal loan, payroll loan or special check, you must inform such amounts in the “Debts and Real Charges” section, with code 11 – Commercial banking establishment.
Remember that debts must be reported separately, even if they are with the same bank.
In the “Description” field, enter exactly what type of debt it is, which could be, for example, a negative balance, a loan, among others. It is also important to include the number of installments.
Source: Santander
Loan as an individual
As already mentioned, it is necessary to declare the loan if the amount taken is above R$1,000.
This category includes all types of loans, as long as the amount is greater than that mentioned above.
The same goes for the credit card, if the debt in question is above R$1,000.
Loans must be reported on the “Debts and real encumbrances” form. Pay attention to the codes provided by the IRS for the loans made.
In the “Discrimination” field, enter data such as destination of the resource, loan amount, payment method and the main information about the financial institution.
Financing
Unlike the previous options, financing, in fact, they are considered financial operations with collateral for the acquired asset.
The declarant must inform each year the amounts of the installments paid and extra amortizations.
Therefore, the taxpayer must report this transaction in the “Assets and Rights” section. This section also includes consortiums and loans with collateral.
A secured loan is a different line of credit. And since the asset is being refinanced, it needs to be included in the “Assets and Rights” form.
Why is it necessary to declare debts on Income Tax?
Every year, the Federal Revenue Service verifies the asset evolution of the taxpayer in question.
This means that it compares payments made with income received.
And it is important to declare the value to justify the difference, since the payments of the installments of a debt modify the value of the individual's assets.
What happens if I don't declare a loan on my Income Tax?
First, it is important to mention that money taken out in a loan is not considered income.
In other words, there is no incidence of tax.
However, this information needs to be filled out so that the Federal Revenue Service can monitor the taxpayer's asset growth.
This means that if you do not make this declaration, you may have problems with the RF.
After all, there is a cross-referencing of data between the declarations completed by the taxpayer and also by the banks.
Remember that failure to pay the money may result in a fine.
What happens if I don't file my income tax return?
Taxpayers who do not declare Income Tax are subject to administrative sanctions.
In other words, anyone who must declare income tax and does not submit the declaration within the deadline established by the Federal Revenue Service is subject to paying a fine of 1% per calendar month or fraction of delay, applicable to the tax due.
The minimum amount, in this case, is R$ 165.74 and the maximum is R$20% of the tax due.
The delay period begins on the first day after the end of the delivery period.
In case you missed the deadline, It is essential to send the information as soon as possible.
In other words, the declaration must be made and submitted, even if it is late.
After submitting the form, a Darf (Federal Revenue Collection Document) will be generated for you to pay the fine.
Government proposal updates IR table, but limits simplified discount
Bill 2337/21, from the Executive Branch, presents changes for individuals, legal entities and investments.
Regarding the measures with the greatest impact, there is the update of the table of Income Tax of the Individual, which readjusts the exemption range from R$ 1,903.98 to R$ 2,500 per month.
The government estimates that 50% of current declarants will no longer pay IR, which corresponds to more than 5 million taxpayers.
Currently, there are 10.7 million exempt people, out of a total of 31 million.
Source: Chamber of Deputies News Agency
Conclusion
Now you know why it is necessary to declare debts on your Income Tax and how to do it.
We hope this information has helped you understand more about the subject!
It is important to mention that any inconsistency in filling in data may cause future problems for you.
Therefore, if you have any questions regarding filling out your Income Tax, look for an accountant, as this professional will help you fill out all the information correctly!
