The Hindu Business Line : A check-list for filing tax returns

A person needs to file an income-tax return if his/her income is above the basic exemption limits. For the financial year 2006-2007, for males, females and senior citizens, the exemption limit is Rs 1 lakh, Rs 1.35 lakh and Rs1.85 lakh, respectively.

Filing returns is mandatory above these limits, even for a salaried person without other sources of income, and for whom tax has been deducted at source.

The last date for filing returns is July 31, 2007. However, it may be advantageous to file returns anyway, as they are usually demanded by banks and financial institutions when one makes investments or takes loans. Also, if refund has to be claimed for tax deduction at source, this becomes important.

What are the supporting documents to be attached?

There is no document to be attached with ITR forms. However, all documents used for calculating income-tax return, such as Form 16, bank statements and advance tax receipts are to be preserved as the IT officer may call for these later, to check the correctness of details in the form.

Information required preparatory to filing returns:

Form 16 — issued by the employer.

Form 16A — issued if tax has been deducted at source (as in the case of bank deposits, tenant to whom a property has been let out and who has deducted tax).

Bank passbooks /statements — which will give information on all the financial transactions in a year.

Details of all share and mutual fund investments, including statements received from depositories and mutual funds.

Details of loans taken.

Property — buying/selling, Income and expenses incurred on property.

Details of taxes paid during the year as advance tax.

All receipts used to claim any deductions (such as donations, insurance premium receipts).

Mandatory disclosures

Investments made in bank deposits, mutual funds, shares or even property in the year 2006-07, above certain threshold, needs to be disclosed as under:

Deposits up to Rs 10 lakh, in any single bank, during the year.

Payments made via a single credit card, aggregating Rs 2 lakh.

Purchase of units of a mutual fund aggregating Rs 2 lakh.

Acquisition of bonds or debentures issued by a company for Rs 5 lakh. or more

Investment in RBI bonds, for Rs 5 lakh or more.

Acquisition of shares of a company, for Rs 1 lakh or more.

Purchase or sale of an immovable property for Rs 30 lakh or more.

Who can help me prepare my returns?

Most people enlist the help of Chartered Accountants. In addition, tax returns can be prepared and filed through Tax Return Preparers (TRPs), authorised for this purpose, at a nominal cost of Rs 250.

Where and how to file returns?

As the process has been centralised, filing of IT returns can be done anywhere in the country, at IT offices and even post-offices. If a person has relocated, just the change of address needs to be intimated and the filing can be done at the new location.

Electronic filing of returns introduced in 2004. Individuals can file returns through authorised intermediaries who digitise the data and send it to the IT Department. However, there have been problems regarding e-filed returns and delays in the processing

Penalties for late filing

If there are no balance taxes to be paid, no interest can be levied. However, a penalty of Rs 5,000 can be imposed by the Tax Department. In case there are tax arrears, 1 per cent per month as interest on the taxes due will be levied as penalty.

Belated returns and Revised returns

Belated returns pertain to the previous assessment year, which can be submitted till the end of the Assessment year, subject to penalties as provided under Section 234A. For people filing for previous years, the respective forms (such as Saral forms) have to be used.

“Revised return” is for those who have filed their returns but discover that something has been omitted or incorrect. They may furnish a revised return, up to the end of the relevant assessment year (or before completion of the assessment).

(The author is a Certified Financial Planner Professional, Certified by FPSB India. The views are personal.)

More Stories on : Income Tax | Income Tax | Young Investor

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Puravankara Projects — IPO: Invest at cut-off

Islands in financial markets

Index Outlook

‘Too much pessimism in many sectors’

A check-list for filing tax returns