All you want to know about tax filing
By Subhash Lakhotia, Tax Guru : CNBC Awaaz, Tax & Investment Consultant
Well, the time to file your Income-tax Return in respect of the financial year 2011-2012 is coming closer, hence in this article various important questions pertaining to Income-tax Return filing are answered for the benefit of tax payers which will help them to correctly comply with the obligations cast on them to file their Income-tax Return.
1. Last Date of IT Return Filing
The last date of filing Income-tax Return for Individuals, HUFs & Firms not having business income for which Tax Audit is required is 31st July, 2012 and for persons with Audit requirements and for companies it is 30th September, 2012 in respect of financial year 2011-2012 relevant to A.Y. 2012-13.
2. I.T. Return Forms for Individuals and HUFs
ITR Form 1,2,3, 4S and 4 can be used by Individuals and HUFs for filing their Income-tax Return. Form No.1 – Sahaj is for persons with Salary/Pension Income, House Property (one house) and Income from other sources. Form No.2 is for persons with no business or professional Income. ITR 3 is for partners of Partnership Firm, ITR 4S – Sugam is for persons with no Business accounts and ITR 4 for persons with Business/Profession income.
3. The basic Income-tax exemption limits
In respect of F.Y. 2011-2012 relevant to A.Y. 2012-2013 the basic Income-tax exemption for Individuals & HUFs is Rs.1,80,000 for male tax payers, Rs..1,90,000 for female tax payers, Rs.2,50,000 for Senior Citizens and the exemption limit would be Rs.5,00,000 for Senior Citizens above 80 years of age. For Firms & Companies the basic Income tax exemption is NIL.
4. Is return to be filed even when no tax is payable.
Yes, please remember that Income-tax Return has to be filed even when tax is not payable as same might have been paid by way of Advance Tax or T.D.S. For e.g. let us take the case of a salaried employee whose salary is Rs.5,20,000 on which tax has been deducted of Rs.37,080, no tax now due but still Income-tax Return is to be filed.
5. Exemption from tax return filing
If the Income is below the basic Income-tax exemption limit then no I.T. Return is to be filed, but please do remember that this limit is in respect of Income before giving impact to the deductions of sections 10A, 10B, 80IA, 80IB, 80IC & Chapter VIA namely deductions under section 80C, 80D etc.
6. Any class of persons for whom the filing of Income Tax Return is compulsory?
Yes, for all Companies, Partnership Firms, Foreign Companies with Business connection in India. Also companies whose entire Income is exempted like Company engaged in Agricultural Business etc. Now if you are holding any asset in foreign country or you are having financial interests in any entity abroad or if you are having signing authority in any account located outside India then also you are compulsorily required to file your Income-tax Return
7. How to choose a Consultant to file I.T Returns
I personally feel that you do not need services of any Consultant to prepare your Income-tax return. You can just see the form and see the Instructions of the Govt. to fill up the form and there you go to get your Income tax Return duly filled up. As far as the fees is concerned you may fix up with any CA or Tax Consultant. The best for Individuals & HUFs is to go in for taking the services of TRP - Tax Return Preparer who would charge you maximum Rs.250 for filing your Income Tax Return You can also file Income tax Return free of cost also from TRP. For more details visit : www.trpscheme.com;
8. What are the prerequisites of getting ready for filing I.T. Return.
Before you get ready to file your Income tax Return please get ready with all the papers and details concerning your total income for the year 2011-12. Now compute your total income. Also calculate the tax payable on your income. Now find out the tax already paid by you or deducted at source. Finally, whatever tax is still payable you should pay the same & only then you can file the I.T. Return. Now is the time to select the correct Income-tax Return form in which you should fill up the Return.
9. What Papers are required to be enclosed with the Income Tax Return.
Happy News now. No papers are required to be enclosed with your Income tax Return. No Profit & Loss A/c & Balance Sheet. No computation Statement. No Audited Accounts copy, no copy of Partnership Deed, No Copies of Challans for Tax Payment and No copies of TDS Certificates are required to be enclosed with your I.T. Returns.
10. What are different modes in which I.T. Return can be filed.
The Income-tax Return can be filed in any one of the following modes :-
a) Furnishing the return in Paper form.
b) Furnishing the return electronically under Digital Signature.
c) Transmitting data electronically and then submitting verification of return in Form ITR – V.
d) Furnishing the Return in bar Coded return in a paper form.
One can choose any mode as one desires, however in many situations the law provides for compulsorily filing the Return in Electronic mode with or without digital signature.
11. For whom it is compulsory to file Income tax Return electronically and with Digital Signature.
All individuals and HUFs having total income exceeding Rs.10 lakhs for the financial year 2011-2012 will now be compulsorily required to file the IT Return electronically with or without Digital signature. Likewise the individuals and HUFs having assets located outside India or signing authority in account located outside India shall be required to file the I.T. Return electronically, with or without Digital Signature. Firms and Individuals as also HUF who are required to furnish IT Return and are subject to Tax Audit shall also submit the I.T. Return electronically with Digital Signature. The Companies should submit I.T. Return electronically with Digital Signature.
12. What is the procedure for submitting I.T. Return Electronically without Digital Signature.
When the I.T. Return is submitted Electronically with Digital Signature then the process is completed and just keep in your record the acknowledgment receipt. However, when the Electronic Return is submitted without Digital signature then the tax payer is required to submit a Verification form of the return in Form ITR-V. this Form is to be submitted within 120 days by ordinary post to Post Box No.1, Electronic City Office, Bangalore – 560100, Karnataka. Print one copy of the ITR – V for your record.
13. Why should we file the Income Tax Return in Time?
The main advantage of filing the Income Tax Return in time is that no penal interest is payable, which otherwise is payable in case of delayed I.T. Return. Second very important point is that in case there is a Business loss or Capital Gain Loss, then if the I.T. Return is not filed in time then the benefit of loss cannot be taken advantage of. Hence do file the I.T. Returns before the last date filing I.T. Return. Lastly Finally, for assesses Claiming tax benefits under sections 10A, 10B, 80IA, 80IB or 80IC of the I.T. Act the filing of Return is compulsory. Finally, non filing of I.T. Return can result in penalty of Rs.5,000/-.
14. Anything special for Tax Returns of Charitable Trusts & Educational Institutions.
The Charitable Trusts and Institutions are required to file the I.T. Return in Form 7. They cannot file the Return electronically. They have to enclose all relevant papers and details with the I.T. Return including copies of Audited Accounts TDS Certificates etc.
15. When is a salaried Employed not required to file I.T. Return.
When a person is a salaried employee and has received salary only from one employer then he is not required to file his Income Tax Return in case he has reported his PAN to employer and that the employer has deducted TDS on his salary Income and such employee has received Form No. 16 from his employer which contains the details of Tax Deducted at Source and deposited to the Credit of the Central Govt. Finally, such person should have only salary income and at best interest on Savings A/c upto Rs.10,000 for which tax deducted by employer & the income of such individual does not exceed Rs.5 lakhs. These are based on the guidelines Dt. 23/6/2011 relevant for the A.Y. 2011-12 and hope they may come this year also.
16. Consequences of filing the I.T. Return after the last date.
In case the Income-tax Return is filed after the last date of filing then penal interest would be payable. Hence to avoid penal interest now file the I.T. Return before due date. Also if there is a loss in Business etc. then non filing of I.T. Return means no benefit of loss carry forward.
17. Do we file different Income tax Returns for different sources of Income?
No, it is one Income Tax Return of one person with all his different sources of Income. Hence, in one Income-tax Return Form the assessee must mention the details of income under different heads of income.
18. You may remember your Nani at the time of filing Income-tax Return.
Yes, at the time of filing Income Tax Return a person may remember his or her Nani specially if tax due has not been paid and no tax deducted at source because the tax due with penal interest has to be paid before filing the Income Tax Return. Please know the tax Rates for Individuals. It is 10% on Income exceeding the exemption limit upto Rs. 5 Lakhs, then Income-tax @ 20% payable on Income in excess of Rs.5 Lakhs upto Rs.8 Lakhs and the tax @ 30% payable on Income in excess of Rs.8 Lakhs. Besides, Education Cess of 2 % & Secondary & Higher Education Cess of 1 % is also payable.
19. During the middle of financial year 2011-2012 a person becomes a Senior Citizen or Major then how to go for filing the Return.
If during the F.Y. 2011-2012 a person becomes Senior Citizen then he will get the benefit for the full year. Likewise, if a person becomes major during the year he will get full benefit of the year and no Clubbing of Income.
20. Wrong Return Filed, then what to do.
If return has been filed with wrong particulars then you can revise the Income-tax Return. No permission or approval required for the same.
The author is Tax and Investment Consultant at