01 July 2012

Basic tax filing queries answered: Business Line

Who has to file I-T returns?
Any individual who earns an income beyond the exempted limit (Rs 2 lakh for the financial year 2012-2013) needs to pay tax as well as file a ‘Return of Income’ to the Income-Tax Department of India. Often, the tax is deducted at the source itself i.e. the employer deducts tax from the salary and transfers it to the I-T department on behalf of the employee. Once the financial year ends, individuals can file for tax returns through decided channels, i.e. either online or by paper mode.
At present, people earning less than Rs 5 lakh from their salary and/or the interest on a savings account, are exempted from filing their I-T return under certain conditions. For example, those who want to claim a refund or have more than one employer in the financial year or earn an interest more than Rs 10,000 from a savings bank account need to file I-T return even if their income is less than Rs 5 lakh.


What documents or details should one keep ready before filing returns?
Form 16/TDS Certificate given by the employer, PAN details are basic requirements before filing returns. If the individual has invested in any Insurance policy then the receipts for payment of premium are needed. If one is paying an interest on a housing loan then details about the interest amount and principal repayment during the year need to be kept ready. Details of investments in shares, capital gains if any are also required.
Is having a PAN card a compulsory thing to file a return? What if someone has lost the PAN Card just before filing his return?
Since the Permanent Account Number (PAN) is a mandatory identification number under the Income-tax act, filing for returns without this number is not possible. If the card has been lost, the number can be obtained from the National Securities Depository Limited (NSDL). The correct PAN is sufficient for filing an I-T return.
However, one must immediately apply for a fresh PAN card which will have the same number.
What if the information on Form16 given by the employer is not complete and the employee still has some additions to it? How can he file his return then?
The Employee/Individual can provide details not on Form16 while preparing the return.
Documentary proof of the investment/income should be provided when required.
How does one get maximum tax benefit?
Provisions under chapter VI A deal with tax deduction. For example, under section 80C, an individual can deduct up to Rs 1 lakh from his gross taxable income. It covers investments in insurance policies, mutual funds, employee provident fund.
Likewise, there is a section called 80D by which a deduction of up to Rs 20,000 for the premium paid on ‘mediclaim policies’ is possible. Investments in Tax saving infrastructure bonds issued by Central Government can also help an individual save up to Rs 20,000 under section 80CCF.
What is the due date for I-T return filing and what if someone misses this date?
The due date is July 31 after the end of the relevant financial year for which I-T return is to be filed. Things get a little complicated if the due date is missed. The I-T department charges a monthly interest of 1 per cent on the tax due along with the tax to be paid whenever the ‘assessee’ is filing his return. Avoiding this will further complicate the situation.
How to tackle intimations from the department after filing return?
If anyone receives intimation from the I-T department, say under section 143(1) or 154 and there is a difference of more than Rs 100 on what is filed and what the department has found, then he has to file a rectification application to rectify any incorrect information in the I-T department’s records.
(The author is MD, myitreturn.com)

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