Income Tax

 

 

 Income tax is a tax paid to the central government on personal income. According to Income Tax Act 1961, every person who is an assessee [an Assessee is a person by whom any tax or any other sum of money (eg. interest, penalty, fine, etc) is payable under the Income Tax Act] and whose total income exceeds the maximum exemption limit shall be chargeable to the income tax at the rate prescribed in the Finance Act.

Section 139(1) of the Income Tax Act has been revised w.e.f 1/8/1998 with the view to make it obligatory upon any person to file return if he/she satisfies any one of the six conditions:

  • Is the owner or the lessee (the user of equipment or property being leased/rented out for a time period) of a Motor vehicle

  • Occupies specified floor area of an immovable property

  • Incurs expenditure for himself or any other person on foreign-travel

  • Subscribes to a telephone

  • Is a holder of the credit card, not being an 'add-on' card, issued by any bank or institution

  • Is a member of a club where the entrance fee charged is Rs.25,000/-or more then he is required to file a return.

Filing of Income Tax Returns (ITR) is a legal obligation of every person whose total income for the previous year has exceeded the maximum amount that is not chargeable for income tax under the provisions of the I.T. Act, 1961. To file your Income Tax returns, you need to submit ITRs. There are different ITRs to file your income returns, depending on your profession/business/property.

Individuals having Income from Salary / Pension / Family Pension & Interest may use the ITR Form 1 to furnish their returns for the assessment year 2007 - 08.

House Property is regarded as a source of income for Income-tax purposes. Income from house property is one of the heads of income under the Income tax Act. In ordinary parlance, your income from house property will presuppose that you have a house from which you are deriving income in the form of rent.
 

Permanent Account Number (PAN)
 

PAN is an all India, unique number of 10 characters allotted by the Income Tax Department. It is permanent for your life, and will not change with change of your address or station, or change of your Assessing Officer, etc. A PAN number is essential for filing returns. For this, you need to apply for a PAN card if you don't already have one. You can avail a PAN card by downloading Form 49A and submitting it in the nearest PAN facilitation centre, or by filling an online form.
 

E-Return
 

Income Tax Department has launched the Electronic Furnishing of Return of Income Scheme, under which eligible assessees can file their returns of income electronically through persons authorised to act as e-return intermediaries. The intermediaries will digitise the data of such returns, and transmit the same electronically to the e-filing server of Income Tax Department under their digital signatures. An eligible person opting to file his return of income under this Scheme shall approach and give his consent to any one of the e-intermediaries to act as his agent for the purpose of furnishing his e-return for the relevant assessment year.
 

Tax Rebate
 

To makes things easier for you, you must be well aware of the various methods of tax rebates provided by the government. You can invest in various ways at the beginning of any financial year, so that the amount of net tax to be paid by you is comparatively reduced or Nil at the time of filing your returns. Some of the common tax-saving instruments include General Provident Fund (GPF), NSC/NSS, Public Provident Fund (PPF), Life Insurance Premium, Employee's Provident Fund Scheme, etc.

Citizens can file their taxes by submitting ITR forms along with your PAN card. Besides this, there are various online services for payment of taxes online provided by the Income Tax Department. Besides this, the National Securities Depository Limited (NSDL) on behalf of Income Tax Department of India (ITD), also provides online services like:
 

  • Application of PAN or Tatkal PAN

  • Online filing of eTDS/TCS

  • Quarterly Statement Status

Apart from the NSDL, the UTI Technology Services also provides online services like:

  • Application for PAN card online

  • AO Search Details

  • Search for PAN card Application Centre

  • Search for PAN card details online

Filing of Returns
 
It’s June end and the time has come to file in your annual tax returns. This year, the income tax department has come up with many new initiatives intended to make tax filing more convenient and handy for the citizens. By this time, all of you must have received Form No.16 (Salary income) and/or Form No.16A (tax deducted on other Income). Likewise, individuals who are engaged in business or profession must have completed adjustments and finalisation of annual accounts.
There are some documents that you should keep ready while filling the IT Returns. These documents help in preparation of the tax return while calculating the tax liability:
  • Form No. 16 (received from the employer): Form 16 is the Annual Salary Statement issued by your employer and provides details about the income earned during the year.
  • Form No. 16A (a form that is received from all the payers who have got their tax deducted). This form needs to be collected from the parties who have deducted the tax while making payment to you during the year. This includes banks and companies (with whom you have kept fixed deposits and so on).
  • Summary of account:  It is important to have a summary of all bank accounts that you operated in the last fiscal year. The bank statements have details of the interest income earned and the expenditures incurred during the year.
  • Details of property owned: If you own some property or bought a new one during the last fiscal year, keep receipts of property tax paid during the year and rent received (if any).
  • Details of sale & purchase with respect to investments or assets sold during the year.
  • Details of any other tax payments made during the year.

How to File Returns

Once the filling of the form is over, the next big thing is submitting it. The forms can be submitted at the concerned Income Tax Office or specially set up counters. Furthermore, the Income tax department has also designated some post offices which are authorised to receive Income Tax Returns.

Further, to put you at ease the Income tax department has specially trained 3700 Tax Return Preparers (TRPs) under a special scheme who will not only guide you how to file in your returns, but will also submit your all form and documents for a nominal amount. To contact a Tax Return Preparer in your area and to know more about the scheme, visit http://www.trpscheme.com

 E-filing

With the power of e-governance, Income Tax Return can also be filed online. Income Tax Department has launched the Electronic Furnishing of Return of Income Scheme, under which eligible assessees can file their returns of income electronically through persons authorized to act as e-return intermediaries.

The intermediaries will digitize the data of such returns, and transmit the same electronically to the e-filing server of Income Tax Department under their digital signatures. An eligible person opting to file his return of income under this Scheme shall approach and give his consent to any one of the e-intermediaries to act as his agent for the purpose of furnishing his e-return for the relevant assessment year.