Arjuna (Fictional Character): Krishna, July month has started. It is said that income tax return has to be filed in this month. So who are required to file income tax return before 31st July and what care they should take before filing it?
Krishna (Fictional Character): Arjuna, every person whose annual income exceeds the basic exemption limit i.e. exceeds Rs.2.5 lakhs, then he will be required to file income tax return compulsorily. Income tax return of F.Y. 2015-16 shall be filed before 31st July.
Arjuna: Krishna, who are required to file income tax return before 31st July?
Krishna: Arjuna, 1) Salaried person, pensioners, 2) Businessman whose sales/ turnover does not exceed Rs. 1 crore, 3) Professionals for example: doctor, etc. whose gross receipts is less than Rs. 25 lakhs i.e. taxpayers other than companies and tax audit taxpayers, 4) Taxpayers having income from house property or other sources are required to file income tax return before 31st July.
Arjuna: Krishna, how will these taxpayers be able to file the return?
Krishna: Arjuna, filing of income tax return has now become much easier. Taxpayers can register themselves on the income tax department’s incometaxindiaefiling.gov.in website by providing mobile number and email id. On this website, the form of return is available. After filling required details in the return, one has to login through his password and file the return online or offline. After the return gets uploaded, the return shall be verified either by aadhar card or through EVC (Electronic verification code) or send a signed copy of acknowledgement to CPC, Bangalore within 120 days.
Arjuna: Krishna, what care shall a salaried person take while filing return?
Krishna: Arjuna, every information about the taxpayer, his income, TDS and deduction is already given in Form 16 of a salaried person. A salaried person should reconcile Form 16 and TDS from form 26AS on the website and file return accordingly. Problem arises when the information about income other than salary and deduction is not in Form 16. For example: Saving bank interest, Interest on FDR, income from house property, profit on sale or purchase of shares, insurance policy premium, etc. If at the last moment, a salaried person feels that he shall not be required to pay tax, he should inform his employer about his total income earlier only. And according to it, the TDS will be deducted and he will have to face fewer problems while filing the return.
Arjuna: Krishna, what care shall a business person take before filing the return?
Krishna: Arjuna, every businessman has to prepare Profit and loss account and Balance Sheet as per the nature of his business or profession. The taxpayer determines the profit/loss by comparing his financials with the previous year. Further as on 31st March, depreciation, stock, accounts of debtors and creditors, etc. have to be reconciled. Also, the figures have to be matched with other tax returns like vat, service tax, etc. The most important thing is that it is mandatory for businessmen having turnover up to 1 crore to show minimum 8% profit, otherwise tax audit provisions will be applicable. Form 26AS is also required to be matched. And yes, it is very important to file Loss return before 31st July 2016, otherwise loss cannot be carried forward to next year.
Arjuna: Krishna, does this means that it is compulsory to file return on time?
Krishna: Arjuna, if a taxpayer does not file income tax return on time, he will have to face difficulties. Along with interest on tax payable, additional interest for late filing of return u/s 234A will also be required to be paid. Loss cannot be carried forward as given above. If he is entitled for a refund, then he would not get interest on the days till which he delays in filing the return. Because of this taxpayer would incur a loss. Return should be filed yearly because a taxpayer can e-file return to only maximum of earlier 2 years. Many taxpayers file income tax returns of previous years so as to avail bank loan. This may create problems in the loan proposal, hence regular and timely filing of returns is beneficial.
Arjuna: Krishna, How does taxpayers behave for filing return?
Krishna: Arjuna, following any law is difficult. As waiting on a signal for a minute also is not bearable and when the signal gets green and when do we get rid from it felt by everybody and that is why many people break the signal and run. The same thing happens with the income tax return. Due date for filing of return is 31st July is known by everybody since years then also they do a mistake by doing haste for it at the last moment. Due to this, there is stress and return filing becomes burdensome. If proper information regarding income and tax is provided to the department through return, the department also avoids giving trouble by sending notices. Otherwise, legal proceedings between the taxpayer and department initiate which creates problem for everyone. In today’s era of information technology and computerization, it is difficult to find a way out. The only option available to the taxpayer is timely and correct payment of tax and filing of returns.
Tags :Income Tax