LIVE PROJECT

E-Filing of ReturnsAn Overview of the Process

Of e-Filing of Returns

A Project Report submitted in partial fulfillment of the requirement for Master in Business Administration (M.B.A)

SUBMITTED BY

PRASHANT JADHAV

Under the guidance of

Mr.Ashwin Gawande. Mr. SUNIL JADHAVLocation Head. Manager- Marketing &Sales.The NIS Academy. Value Plus Consultancy.

The NIS AcademyMumbai-400072

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ACKNOWELEDGEMENT

One of the pleasant aspects of preparing a project report is the opportunity to

thank to those who have contributed to make the project completion

possible.

I am extremely thankful to Mr.Sunil jadhav & Mr.Ashwin Gawande.

whose active interest in the project and insights helped us formulate,

redefine and implement our approach towards the project.

I am also thankful to all those seen and unseen hands & heads, which have

been of direct or indirect, help in the completion of this project.

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CERTIFICATE

This is to certify that Prashant Shivaji Jadhav has successfully completed the

project work as partial fulfillment of the requirement for Master in Business

Administration. (M.B.A.)

Name and Signature of Project Guide

Place:________________Date: _________________

_________________________________

Signature of the Location Head of

THE NIS ACADEMY Gundecha Onclave, 4th Floor,

Kherani Road, Sakinaka, Andheri (East), Mumbai-400072.

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EXECUTIVE SUMMARY

I, Prashant Jadhav have done my project in VALUE PLUS CONSULTANCY. This is a leading company in providing financial service. The main objective of my project was about “e-Filing of Returns”. The project contains a detailed study of income tax and e-filing. I am very privilege to work in this company. It was a great exposure to learn about income tax return and online transaction etc.

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INDEX

Sr. No. Particulars Pg. No.

1. INTRODUCTIONOBJECTIVE,MISSION & POLICIES 6

2. COMPANY PROFILE 7

3. BASIC INFORMATION ABOUT TAX 10

4. TAXABLE HEAD OF INCOME TAX 16

5.TAX BENIFITES - DEDUCTIONS, REBATES & DONATIONS 23

6. INCOME TAX E-FILING 33

7. TYPES OF E-FILING 35

9. PROCESS OF E-FILING 38

10. FREQUENTLY ASKED QUESTION 47

11. SUMMARY & CONCLUSION 59

12. BIBLOGRPHY 60

INTRODUCTION:

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OBJECTIVE:

To find the market potential and market penetration of financial product offerings in Mumbai and local area nearby them.

To collect the real time information about preference level of customers and give the best solution

To expand the market penetration on financial service

To provide pricing strategy of competitors to fight cut throat competition.

To increase the product awareness of Value Plus Consultancy as single window shop for investment solutions.

MISSION:

To create long term value by empowering individual investors through superior financial services supported by culture based on highest level of teamwork, efficiency and integrity.

VISION:

To provide best value for money to investors through innovative products.

Trading/Investments Strategies State of the art technology and personalized service.

CUSTOMER PROMISE:

They are passionate about their customers' success and promise to deliver exceptional service with every meeting, interaction and dealing. They strive to offer simple, straightforward, friendly and trustworthy service.

COMPANY PROFILE:

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VALUE PLUS CONSULTANCY

                        GIVE MIDAS TOUCH TO YOUR INVESTMENTS

IT IS A PART OF EMPIRE GROUP OF COMPANIES

VALUE PLUS is solely & wholly dedicated for investors. VALUE PLUS is an investment supermarket offering Life Insurance, Mediclaim, Vehicle Insurance, Property Insurance, Postal Schemes, and More than 600 Mutual Fund Schemes and Fixed Deposits of quality companies, RBI Relief Bonds, Debentures and Shares.  It is engaged in providing financial planning of investor as per their needs and technology based services to investors to effectively manage their portfolio. 

VALUE PLUS   Today:  

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o        One of the largest distributors of Mutual Funds in Mumbai.o        Having over 2000 satisfied customers.

 

What we offer: 

o        Complete Financial Planning & Investments solutiono        True client-focused, need-based investment advisory serviceso        Top quality products for managing investmentso        Quality services and support to clients

Our Philosophy: 

o        We believe in long-term wealth creation for our clients.o        We believe in Asset Allocation principle for wealth creation.o        We are not guided by the short-term profit making, timing markets,

etc we do not believe in them.o        We believe that mutual funds, as an investment product, can be

effectively used to successfully meet       the different needs of different clients.o    Provide clients with solutions that truly meet their needs and have

high quality products and services,       better that anyone else can provide. 

 

What makes us different?

o        Our Philosophy and the way we carry it.o        Very strong domain knowledge of mutual funds with very strong

focus on it.o        Our technology is the probably the best in the industry.o        The Products and the Contents are very comprehensive, well-

structured and of high quality.o        The scope and the depth is probably unmatched by any other

Distributor or Bank.o        In-house Research Team to study and analyse schemes, markets,

economy, events etc.

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o        Money World Customer Care - A dedicated department for effective and quick resolving of queries and

      requests.o        Team of Qualified & well trained people

BASIC INFORMATION ABOUT TAX

Taxes in India are of two types, Direct Tax and Indirect Tax.

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Direct Tax, like income tax, wealth tax, etc. are those whose burden falls directly on the taxpayer.

The burden of indirect taxes, like service tax, VAT, etc. can be passed on to a third party.

Income Tax is all income other than agricultural income levied and collected by the central government and shared with the states.

According to Income Tax Act 1961, every person, who is an assessee and whose total income exceeds the maximum exemption limit, shall be chargeable to the income tax at the rate or rates prescribed in the finance act. Such income tax shall be paid on the total income of the previous year in the relevant assessment year.

The total income of an individual is determined on the basis of his residential status in India.

INCOME TAX RETURN• Income Tax Return" is a term which is often used when we talk about

income tax. It is a way by which we pay this tax. When total annual income of a person, including all sources, is more than maximum unchangeable limitation ( At present it is Rs. 1,50,000/-) then that person is liable to pay income tax.

• According to Income Tax Act 1961, every person, who is an assesse and whose total income exceeds the maximum exemption limit, shall be chargeable to the income tax at the rate or rates prescribed in the finance act.

Residence Rules

An individual is treated as resident in a year if present in India

I. for 182 days during the year or

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II. for 60 days during the year and 365 days during the preceding four years. Individuals fulfilling neither of these conditions are nonresidents. (The rules are slightly more liberal for Indian citizens residing abroad or leaving India for employment abroad.)

A resident who was not present in India for 730 days during the preceding seven years or who was nonresident in nine out of ten preceding yeas I treated as not ordinarily resident. In effect, a newcomer to India remains not ordinarily resident.

For tax purposes, an individual may be resident, nonresident or not ordinarily resident.

Non-Residents and Non-Resident Indians

Residents are on worldwide income. Nonresidents are taxed only on income that is received in India or arises or is deemed to arise in India. A person not ordinarily resident is taxed like a nonresident but is also liable to tax on income accruing abroad if it is from a business controlled in or a profession set up in India.

Capital gains on transfer of assets acquired in foreign exchange is not taxable in certain cases.

Non-resident Indians are not required to file a tax return if their income consists of only interest and dividends, provided taxes due on such income are deducted at source.

It is possible for non-resident Indians to avail of these special provisions even after becoming residents by following certain procedures laid down by the Income Tax act.

Taxability of individuals is summarized in the table below

Status Indian Income Foreign Income

Resident and ordinarily resident Taxable Taxable

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Resident but not ordinary resident Taxable Not Taxable

Non-Resident Taxable Not Taxable

Know how of Income Tax

Income tax is levied on the 'total income' of the assessee. Income of the 'previous year' is taxed in the 'assessment year.' Income is classified into and computed under five categories called

'heads of income.' The basic scheme of income tax is the principle 'pay as you earn.' One must pay his taxes in advance and by the due dates, in the

prescribed percentages. Deferment in the payment of advance tax would result in the payment

of interest.

The income tax basic scheme is explained in brief as: Income tax is levied on the 'total income' of the assessable entity

which is computed under the provisions of the Act. The income which are pertaining to the 'previous year' is taxed, but in

the 'assessment year.' Income tax is charged at the rates being fixed by the for the year by

the annual Finance Act. But the liability to pay the tax is based on the principle 'pay as you earn.'

Also check Taxable Heads of Income for the definition of salary, wages, pension, allowance, etc.

Pay as you EarnA person is not allowed to wait until 31 March to pay his/her taxes. The Income Tax Act has the provision of 'pay as you earn.' This do not pinch a tax payer at the end of the year making a lump sum payment. Such payments

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PERSONAL TAX RATES

For individuals, HUF, Association of Persons (AOP) and Body of individuals (BOI):

For the Assessment Year 2009-10

Taxable income slab (Rs.) Rate (%)

Up to 1,60,000Up to 1,90,000 (for women)Up to 2,40,000 (for resident individual of 65 years or above)

NIL

1,60,001 – 3,00,000 10

3,00,001 – 5,00,000 20

5,00,001 upwards 30*

*A surcharge of 10 per cent of the total tax liability is applicable where the total income exceeds Rs 1,000,000.Note : -

Education cuss is applicable @ 3 per cent on income tax, inclusive of surcharge if there is any.

A marginal relief may be provided to ensure that the additional IT payable, including surcharge, on excess of income over Rs 1,000,000 is limited to an amount by which the income is more than this mentioned amount.

Agricultural income is exempt from income-tax.

TDS (Tax deducted at source)This tax is deducted at the source of income, by the employer or the payer and paid to the government. It includes salary, interest, commission and contract fees, rent, professional fees, etc. This type of deduction is popularly known as TDS. Such tax is subject to certain limits and certain conditions. For example if the earning up on fixed deposit is Rs. 5,000 in a bank, TDS at 10% and education cues at 2% i.e. a total of 10.2% will be deducted at the

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time of credit or at the time of payment, whichever is earlier.

In case of senior citizen, if he/she estimates that the tax on the income is nil, Form No.15H duly filled and signed is to be submitted in duplicate to the bank. So, no TDS will be deducted. If the total income is less than the threshold limit, Form No.15G is to be submitted to the payer to prevent TDS from such interest.

TCS (Tax collected at source)Unlike tax deducted at source, TCS is collected by a seller of certain specified goods at the specified rates on the purchase of the goods and it is remitted to the treasury on behalf of the buyer. In the same way, a person granting a lease or license in a parking lot, toll-plaza, etc. collects the taxes at the specified rates as tax paid on behalf of the lessee.

Advance TaxAdvance Tax is paid by the income earner during the previous year. The computing of the liability of advance tax is done by estimating the 'total income' for the year, calculating the surcharge and taking into consideration the rebate that will be available. The advance tax is required to be paid in three installments.

Schedule of Advance Tax:

AOn or before 15 September

Not less than 30% of advance tax.

BOn or before 15 December

Not less than 60% of advance tax as reduced by amount paid earlier.

COn of before 15 March

Full advance tax as reduced by the amount or amounts if any, paid in earlier installments.

If the assessee does not pays the advance tax as described above, an interest of 1% is charged per month for 3 months for the deferment of advance tax installment. If the total amount of advance tax is not paid on or before 15 March, an interest of 1% is charged for one month.

Further, if the total advance tax paid is less than 90% of the advance tax payable, the interest at 1% per month is charged for the shortfall in the

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advance tax paid for the period commencing from 1 April of the assessment year and ending on the date of payment or assessment, whichever is earlier.

Income Tax Rates Across the World

Country Personal Income Tax Rate

Australia 0% - 48.5%

Canada 16% - 29%

Estonia 24% - 24%

Denmark 44% - 63%

Hong Kong 0% - 33%

India 0% - 33%

Israel 10% - 49%

Malaysia 0% - 29%

Mexico 3% - 32%

Russia 13% - 13%

Singapore 0% - 22%

UK 0% - 40%

US 10% -35%

TAXABLE HEAD OF INCOME TAX

The total income of a person is divided into five heads, viz., taxable.

1. Income from Salary

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2. Income from House Property3. Income from profits and gains of Business or Profession4. Income from Capital Gains5. Income from Other sources

• Salary Income:- In certain cases, an employee can claim both HRA (house rent

allowances) as well as interest on housing loan.

• House property Income :- if interest paid for property given on rent is less than taxable

rent (after standard deduction -30%). Such loss can be set off against income from other heads including income from salary.

• Income from capital gain:-surplus from derivative contracts is non- speculation.

Archaeological collection, Drawings, Painting, Sculptures, Any other work of Art. Thus, now any surplus received from sale of these articles would be liable to tax under the head capital gain.

• Business income :- Any type of income received from business

• Income from other sources:- Dividend, Commission, lotteries, crossword puzzles, races

including horse races, card games, any sort or from gambling or betting

Individual Heads of Income

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Income from Salary

All income received as salary under Employer-Employee relationship is taxed under this head. Employers must withhold tax compulsorily, if income exceeds minimum exemption limit, as Tax Deducted at Source (TDS), and provide their employees with a Form 16 which shows the tax deductions and net paid income. In addition, the Form 16 will contain any other deductions provided from salary such as:

1. Medical reimbursement: Up to Rs. 15,000 per year is tax free if supported by bills. (Company pays Fringe Benefit Tax on this amount)

2. Conveyance allowance: Up to Rs. 800 per month (Rs. 9,600 per year) is tax free if provided as conveyance allowance. No bills are required for this amount.

3. Professional taxes: Most states tax employment on a per-professional basis, usually a scabbed amount based on gross income. Such taxes paid are deductible from income tax.

4. House rent allowance: the least of the following is available as deduction

1. actual HRA received2. 50%/40%(metro/non-metro) of 'salary'3. rent paid minus 10% of 'salary'. Salary for this purpose is

basic+DA forming part+commission on sale on fixed rate.

Income from salary is net of all the above deductions.

Income From House property

Income from House property is computed by taking what is called Annual Value. The annual value (in the case of a let out property) is the maximum of the following:

Rent received Municipal Valuation Fair Rent (as determined by the I-T department)

If a house is not let out and not self-occupied, annual value is assumed to have accrued to the owner. Annual value in case of a self occupied house is to be taken as NIL. (However if there is more than one self occupied house then the annual value of the other house/s is taxable.) From this, deduct

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Municipal Tax paid and you get the Net Annual Value. From this Net Annual Value, deduct :

30% of Net value as repair cost (This is a mandatory deduction) Interest paid or payable on a housing loan against this house

In the case of a self occupied house interest paid or payable is subject to a maximum limit of Rs,1,50,000 (if loan is taken on or after 1 April 1999) and Rs.30,000 (if the loan is taken before 1 April 1999). For all non self-occupied homes, all interest is deductible, with no upper limits.

The balance is added to taxable income.

Income from Business or Professiono carry forward of losses

An example .. An architect works out of home and co-ordinates work for his clients. All the following expenses would be deductible from his professional fees.

he uses a computer, he travels to sites in his car, he has a peon to help him collect payments He has a maid who comes in daily part of the society maintenance bills entertainment expenses incurred.. books and magazines for his professional practice.

The income referred to in section 28, i.e, the incomes chargeable as "Income from Business or Profession" shall be computed in accordance with the provisions contained in sections 30 to 43D.

The computation of income under the head "Profits and Gains of Business or Profession" depends on the particulars and information available.

Income from Capital Gains

Transfer of capital assets results in capital gains. A Capital asset is defined under section 2(14) of the I.T. Act, 1961 as property of any kind held by an

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assessee such as real estate, equity shares, bonds, jewellery, paintings, art etc. but does not include some items like any stock-in-trade for businesses and personal effects. Transfer has been defined under section 2(47) to include sale, exchange, relinquishment of asset, extinguishment of rights in an asset, etc. Certain transactions are not regarded as 'Transfer' under section 47.

For tax purposes, there are two types of capital assets: Long term and short term. Long term asset are held by a person for three years except in case of shares or mutual funds which becomes long term just after one year of holding. Sale of such long term assets gives rise to long term capital gains. There are different scheme of taxation of long term capital gains. These are:

1. As per Section 10(38) of Income Tax Act, 1961 long term capital gains on shares or securities or mutual funds on which Securities Transaction Tax (STT) has been deducted and paid, no tax is payable. STT has been applied on all stock market transactions since October 2004 but does not apply to off-market transactions and company buybacks; therefore, the higher capital gains taxes will apply to such transactions where STT is not paid.

2. In case of other shares and securities, person has an option to either index costs to inflation and pay 20% of indexed gains, or pay 10% of non indexed gains. The indexation rates are released by the I-T department each year.

3. In case of all other long term capital gains, indexation benefit is available and tax rate is 20%.

All capital gains that are not long term are short term capital gains, which are taxed as such:

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Under section 111A, for shares or mutual funds where STT is paid, tax rate is 10% From Asst Yr 2005-06 as per Finance Act 2004. For Asst Yr 2009-10 the tax rate is 15%.

In all other cases, it is part of gross total income and normal tax rate is applicable.

For companies abroad, the tax liability is 20% of such gains suitably indexed (since STT is not paid).

Income from Other Sources

This is a residual head, under this head income which does not meet criteria to go to other heads is taxed. Also there are also some specific incomes which are to be taxed under this head.

1. Income by way of Dividends2. Income from horse races3. Income from winning of lotteries4. Income from winning bull races5. Any amount received from key man insurance policy.6. Any sort or from gambling or betting 7. Income from commission 8. Income from crossword puzzles9. Income from card games

Income Exempt from Tax

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Sections 10,10A, 10AA, 10B, 10BA, and 13A deal with income which does not form part of an assessee's total income. While section 10 provides a list of income absolutely exempt from tax, sections 10A, 10AA, 10B, 10BA, and 13A deal with specific exemptions available to newly established industrial undertakings in free trade zones, and political parties. These exemptions are provided from social, political, Constitutional considerations, for avoiding double taxation, on the basis of casual and non-recurring nature ,on the basis of non-residents and non-citizens status, on the basis of Certain specific securities, bonds, certificates, funds and the like, on the basis of Education, science, research, achievements, rewards, sports, charity, on the basis of certain types of bodies, funds and institutions, Subsidies to promote business, and international, economic, and other considerations. Sikkim is the only state of India where citizens do not pay income tax. Residents of Sikkim are eligible for this exemption but excluding the non-Sikkimese spouse of a Sikkimese.

Agricultural Income [Section 10(1)] Eligible Assesses :- All assesses Exempt income  :- Agricultural income Other points :- Agricultural income means as it is defined in Section 2(1A) In case of individual, HUF, AOP, BOI, unregistered firms and artificial juridical persons, agricultural income is to be aggregated for the purpose of determining the rate of tax on Non-Agricultural income and they would get tax rebate or relief.

Dividends

Dividend income (as referred u/s 115-O of the I.Tax Act) paid by Companies and Mutual Funds are exempt from tax. A 15% dividend distribution tax and surcharge of 3% is paid by companies before distribution. Equity mutual funds (with more than 65% of assets invested in equities) do not pay a dividend distribution tax, though other funds do. Liquid and Money Market funds pay 25% dividend distribution tax.01123

Other Exempt Income

The Indian Income tax act specifically exempts certain income from tax:

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Money received from an Insurance company as proceeds of an insurance policy (by way of an insurance claim, or by maturity) is generally exempt. However there are three types of payments under life insurance policy that are not tax free . These are :

any sum received under sub-section (3) of section 80DD or sub-section (3) of section 80DDA - this refers to specific policies for disabled dependants; or

any sum received under a Keyman insurance policy; or any sum received under policies issued on or after 1 April 2003

where premium paid is greater than 1/5th the sum assured

Maturity proceeds of a Public Provident Fund (PPF) account.

Tax Benefits - Deductions, Rebates & Donations

Rebates

Section 80C

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INSERT (AY 2008-09)Senior Citizens Savings Scheme 2004 and the Post Office Time Deposit Account added to the basket of saving instruments under Section 80C of the Income Tax Act.

Section 80L used to allow deduction of interest earned on, say, a National Savings Certificate or a bank deposit up to a limit of Rs 12,000. But now all these are gone .In their place has come Section 80C -- "u/s 80CCC, & u/s 80CCD", as the Finance Bill puts it. Thus, the new Section 80C of the Income Tax Act proposed in Union Budget gives you a bigger tax break than what the current regime offers.

Deduction in respect of Life Insurance Premium, Contribution to Provident Fund, etc.

Rs 1 lakh can be invested under this section without any individual sub-limits except in the case of Rs 10,000 in pension funds.

Sections 88, 80L, 80CCC and 80CCD is clubbed in.

INSERT (AY 2007-08)It is proposed to insert clause (xxi) in sub-section (2) of this section in order to provide that the investment in a term deposit for a fixed period of not less than five years with any scheduled bank shall be eligible for a deduction under this section.

Schemes eligible for Section 80C benefits PPF ELSS - Mutual Funds NSC KVP

Life Insurance Senior Citizen Saving Scheme 2004 Post Office Time Deposit Account

Note : - Section 80CCC is for deduction in respect of contribution to certain Pension Funds. Section 80L is for deductions in respect to Interest on certain

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Securities, Dividends, etc

Sections abolished from Union Budget 2005-06 88 (Rebate on Life Insurance Premium, Contribution to Provident

Fund) 80L (Deductions in respect to Interest on certain Securities,

Dividends, etc.) Note :-

Rebate of Rs 5,000 for women and Rs 20,000 for senior citizens have been wiped off.

The key features of the new provision Exemption available to all taxpayers irrespective of income bracket -

earlier Section 88 did not provide benefit to those having income exceeding Rs 500,000.

No exemption/adjustment for interest income All saving modes/options under Section 88 covered and also 80CCC

and 80CCD covered.

Following benefits will continue irrespective of changes Interest paid on housing loan for self-occupied house property. Medical insurance premium. (Additional deduction of Rs 15000 u/s

80D to an individual paying medical insurance premium for his/her parent(s)

Specified expenditure on disabled dependant. Expenses for medical treatment for self or dependant or member of an

HUF. Deduction in respect of interest on loans for pursuing higher studies -

Section 80E. Deduction to person with disability.

Section 10(33) Dividends from mutual funds are fully exempt from income tax under Section 10(33). Equity funds (schemes that invest 50 per cent of their funds in equity) are also exempt from dividend tax. This means that unlike companies, they do not have to pay tax at the rate of 10.2 per cent on the dividend that they distribute.

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INSERT (AY 2008-09)Coir Board included in Section 10(29A) and exempted from income tax.

Section 88Upto 31 March 2005, rebates were available on the tax payable under three sections.

According to the section, 30 per cent or 20 per cent or 15 per cent of the amount invested in certain schemes (schemes referred in Section 80C) was available as a rebate on the tax payable.

30 per cent of the amount invested was available as rebate only if the salary income of the individual was less than Rs. 1 lakh and if it constituted 90 per cent or more of the assessee's gross total income.

20 per cent of the amount invested was available as rebate if the gross total income of the individual was less than Rs 1.5 lakh and the case did not fall under the above mentioned case.

If gross total income was more than Rs. 1.5 lakh but less than Rs 5 lakh of the individual, a rebate of 15 per cent of the amount invested was available.

If gross total income was more than Rs 5 lakh of the individual, then there is no rebate.

Section 88B

INSERT (AY 2008-09)A new sub-section (11C) in Section 80-IB to grant a five year tax holiday to encourage hospitals to be set up anywhere in India, except certain specified urban agglomerations, and especially in tier-2 and tier-3 towns in order to serve the rural hinterland. This window will be open for the period April 1, 2008 to March 31, 2013, during which the hospital must commence operations.

Under this section, an individual resident in India and above the age of 65 years was allowed to a maximum rebate of Rs. 20,000 on the tax payable.

Section 88CUnder this section a lady resident in India, aged below 65 years, was allowed a maximum rebate on the tax payable of Rs 5,000.

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Section 89 (1) This is available to an employee when he receives salary in advance or in arrear or when in one financial year, he receives salary of more than 12 months or receives 'profits in lieu of salary' W.e.f. 1.6.89, relief u/s 89(1) can be granted at the time of TDS by employees of all companies co-operative societies, universities or institutions as well as govt./public sector undertakings. The relief should be claimed by the employee in Form No. 10E and should be worked out as explained in Rule 21A of the Income Tax Rules.

Deductions

Section 80CCC

Look for INSERT for AY 2008-09

Any individual who makes a contribution for any annuity plan of the Life Insurance Corporation of India or any other insurer is eligible for a deduction of the amount paid or Rs. 10,000, whichever is less. When an individual or his nominee receives any amount under the following circumstances it will be taxed as the income of the individual or his nominee, in the year of withdrawal or the year in which the pension is received:

On the surrender of the annuity plan or

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As pension received from the annuity plan.

INSERT (AY 2007-08)The limit of investment is proposed to increase from Rs 10,000 to Rs 1,00,000 subject to overall cap of Rs 1,00,000 provided under section 80CCE.

Section 80CCD

The deduction for contributions to a pension scheme of the Central Government is available only to those individual who have been employed by the central government on or after 1st January 2004, and will be allowed for any amount deposited in such a pension scheme. But, in this case, deduction of more than 10 per cent of the employee's salary shall not be allowed.

The contributions to the fund are also made by the Central Government. Deduction will be available for any contribution which is made by the Central Government or 10 per cent of the employee's salary, whichever is less.

When the individual or his nominee receives any amount out of the scheme which meets the following descriptions, it shall be taxed in the hands of the recipient.

On closure/ opting out of the pension scheme; or As pension received from the annuity plan.

The term 'salary' here includes Dearness Allowance (if considered for retirement benefits), but it excludes other allowances and perquisites.

The aggregate deduction under the Sections 80C, 80CCC and 80CCD cannot exceed Rs 1 lakh as whole.

Section 80D

INSERT (AY 2008-09)Additional deduction of Rs 15,000 under Section 80D is allowed to an individual who pays medical insurance premium for his/ her parent or parents.

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Any Premium which is paid for medical insurance that has been taken on the health of the assessee, his spouse, dependent parents or dependent children, is allowed as a deduction, subject to a ceiling of Rs 10,000.

Where any premium is paid for medical insurance for a senior citizen, an enhanced deduction of Rs 15,000 is allowed. The deduction is available only if the premium is paid by cheque.

INSERT (AY 2007-08)Under section 80D, the deduction has been increased to Rs 15,000 and for senior citizen it is now Rs 20,000.

Section 80DDDeduction under this section is available to an individual who:

Incurs any expenditure for the medical treatment, training and rehabilitation of a disabled dependant; or

Deposits any amount in schemes like Life Insurance Corporation for the maintenance of a disabled dependant. An annuity or a lump sum amount is paid to the dependant or to a nominee for the benefit of the dependant in the event of the death of the individual depositing the money, from the said scheme,

A deduction of Rs 50,000 is available. Where the depandant is with a severe disability, a deduction of Rs 1,00,000 is allowed. (As per AY 2009-10)

If the death of the dependant occurs before that of the assessee, the amount in the scheme is returned to the individual and is taxable in his hands in the year that it is received.

An individual should furnish a copy of the issued certificate by the medical board constituted either by the Central government or a state government in the prescribed form, along with the return of income of the year for which the deduction is claimed.

The term 'dependent' here refers to the spouse, children, parents and siblings of the assessee who are dependant on him for maintenance and who themselves haven't claimed a deduction for the disability in computing their total incomes.

This deduction is also available to Hindu Undivided Families (HUF).

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Section 80DDBAn individual, resident in India spending any amount for the medical treatment of specified diseases affecting him or his spouse, children, parents, brothers and sisters and who are dependant on him, will be eligible for a deduction of the amount actually spent or Rs 40,000, whichever is less.

Note:- For the complete list of disease specified, refer to Rule 11DD of the Income Tax Rules.

For any amount spent on the treatment of a dependent senior citizen an individual is eligible for a deduction of the amount spent or Rs 60,000, whichever is less is available.

The individual should furnish a certificate in Form 10-I with the return of income issued by a specialist working in a government hospital.

If any amount of medical expenditure is borne by the employer or is reimbursed under an insurance scheme, the eligibility of the deduction is the reduction to that extent. This deduction is also available to Hindu Undivided Families (HUF).

Section 80E

INSERT (AY 2009-10)Deduction under section 80E of the Income-tax Act allowed in respect of interest on loans taken for pursuing higher education in specified fields of study to be extended to cover all fields of study, including vocational studies, pursued after completion of schooling.

Under this section, deduction is available for payment of interest on a loan taken for higher education from any financial institution or an approved charitable institution. The loan should be taken for either pursuing a full-time graduate or post-graduate course in engineering, medicine or management, or a post-graduate course in applied science or pure science.

The deduction is available for the first year when the interest is paid and for the subsequent seven years. Up to March 2005, deduction was available for the repayment of principal and interest aggregating to Rs 40,000 a year.

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Section 80UIt is deduction in the case of a person with a disability. An individual who is suffering from a permanent disability or mental retardation as specified in the persons with disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 or the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999, shall be allowed a deduction of Rs 50,000. In case of severe disability it is Rs. 75,000.

The assessee should furnish a certificate from a medical board constituted by either the Central or the State Government, along with the return of income for the year for which the deduction is claimed.

Donations

Section 80G

For the Assessment Year 2009-10

Donations to electoral trusts to be allowed as a 100 percent deduction in the computation of the income of the donor.

For the Assessment Year 2006-07

Under this section deduction is made in respect of donations to certain funds, charitable institutions, etc. Deduction is not available for donations given in kind.

The deduction is available only for the entity to which donations is made is an approved charitable institution by the government. A receipt of the institute, in evidence made, should be attached to the return of income.

Section 80GGUnder this section a non-salaried person or a salaried person, if, not getting house rent allowance, he/she can claim to the deduction for the rent he pays

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for a residential accommodation. The deduction available is least of the following:

Rent paid in excess of 10 per cent of total income. 25 per cent of total income. Rs 2,000 per month.

The total income of the individual is computed after reducing the amount deductible under other sections, receipts exempt from tax, and long-term & short-term capital gains taxable at concessional rates.

The deduction is not available if the assessee or his spouse or minor child owns the accommodation in which he stays or works, or carries on his business or profession. Deduction is even not allowned, if the assessee owns a house in any other place, and the concession in respect of self-occupied house is claimed by him.

Section 80GGAAn individual, who is not engaged in any business or profession, is eligible for a deduction of the amount donated to certain institutions engaged in scientific research, rural development, etc.

Section 80GGCIt is the deduction in respect of contributions given by any person to political parties. An individual shall be allowed to a deduction of any amount contributed by him to a political party.

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INCOME TAX E-FILING

E-filing of Tax Returns

• The process of electronically filing Income tax returns through the internet is known as e-Filing.

• It is mandatory for Companies and Firms requiring statutory audit u/s 44AB to submit the Income tax returns electronically for AY 2009-10.

– Any Company/Firm requiring statutory audit u/s 44AB return submitted without a e-Filing receipt will not be accepted.

• e-filing is possible with or without digital signature.

The Income Tax Department is keen to encourage efiling of IT returns by all taxpayers in view of the following benefits to taxpayers.

Anywhere-Anytime Filing No long queues No Personnel Interface Quick Processing Accurate data in return

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Paid taxes, made your tax saving investments... now get geared up for filing income tax returns as the month of July is on the horizon and the time has come when one is supposed to file IT returns.

In the year 2007 the Income Tax Department of India took many initiatives such as training TRPS, launching saral forms in a new avatar and so on for making tax filing convenient and handy for the citizens.

In this e-age when ICT is successfully intervening in so many fields and providing services from online banking to online news, online mutual fund investments to online buying and selling, the Income Tax Department of India launched the Electronic Filing of income tax returns.

Yes, using the e-filing process one can file in tax returns just within a few clicks at any time of the day and that too without any hassles. Using this technology all you have to do is fill the form and submit it, online or offline.

MORE ABOUT THE E-FILING PROCESS WORK

The e-filing process is really easy and takes a very little time and all you have to do is fill up your tax return form online provided and the other required information about income, expenditure and savings. Filing tax returns online is the easiest and the simplest method and all one needs is to log on and follow the simple instructions.

For e- filing process one needs to have a software application that generates the income tax form, which is available at the Income Tax Department website.

Benefits of e-Filing:

One of the foremost benefits of electronic filing is the facility of anywhere / anytime filing, and one can just file returns anytime of the day or night. Other than this, online tax returns are processed much faster than paper returns and the tax is worked out automatically as the payee completes the form. With this the payee also gets the acknowledgement slip immediately. Also online filing is a safe and secure mode.

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TYPES OF E-FILING There are three ways to file returns electronically.

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Option 1: Use digital signature, in which case no further action is required.

Option 2: File without digital signature, in which case ITR-V form is to be filed with the department. This is a single page receipt cum verification form.

Option 3: File through an e-return intermediary who would do eFiling and also assist the Assessee file the ITR -V Form.

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Documents required for e-filing

• Form No. 16 (for Tax deducted by employers)

• Form No. 16A

• Account statements of bank accounts

• Property details

• Sale and purchase of investments / assets

• Details of tax payments made

• PAN card photo copy

• Birth date

• TAN number

• Bank A/c no

• Bank details – MICR code, Type of A/c.

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PROCESS OF E-FILING

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12 Step Process for Filing Tax Returns

Whether you wish to go in for the quick e-filing process or manually file your income tax returns, here is a helpful guide to assist you in completing and submitting this vital document by yourself.

1) Go to the website http://www.incometaxindia.gov.in/

2) Click the link eFile Income Tax Return at the top left corner of the home page

3) Select the Correct Form - There are two income tax forms for salaried individuals. ITR-1 is for those who derive their income from salary, pension or interest while ITR-2 is for income from capital gains, house property and other sources. Those who wish to submit their tax returns manually may download the pdf forms - External website that opens in a new window from

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here. These forms need to be printed, filled by hand and signed before submitting to your local income tax office.

For Individuals, HUF (Hindu Undivided Families)

Select appropriate Income Tax Return (ITR) Preparation Software

ITR-1 ITR-2 ITR-3 ITR-4

Individual Individual Individual Individual

& HUF & HUF & HUF

1

Income from Salary/Pension ▪ ▪ ▪ ▪

2

Income from Other Sources (only Interest income or Family Pension)

▪ ▪ ▪ ▪

3

Income/Loss from Other Sources ▪ ▪ ▪

4

Income/Loss from House Property ▪ ▪ ▪

5

Capital Gains/Loss on sale of investments/property

▪ ▪ ▪

6

Partner in a partnership Firm ▪ ▪

7

Income from Proprietary Business/Profession

▪

Select appropriate type of Return Form ITR 1 to ITR 8

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For Association of Persons (AoP), Body of Individuals (BoI), Local Authority, Companies, Trusts, Fringe Benefit Tax (FBT) Return

Select appropriate Income Tax Return (ITR) Preparation Software

ITR-5 ITR-6 ITR-7 ITR-8

Firms, AoP, BoI, LA

Companies

Trusts Only FBT

1 Income/Loss from Other Sources

▪ ▪ ▪

2 Income/Loss from House Property ▪ ▪ ▪

3 Capital Gains/Loss on sale of investments/property

▪ ▪ ▪

4 Income/Loss from Business ▪ ▪ ▪

5 Fringe Benefit Tax ▪ ▪ ▪ ▪

ITR-7 will not be available for e-Filing

WHO CAN USE WHICH FORM

ITR-1

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This Form can be used by an individual whose total income during the previous year i.e., financial year 2008-09 includes income chargeable to income-tax under the head “salaries” or income in the nature of family pension as defined in the Explanation to clause (iia) of section 57 but does not include any other income except income by way of interest chargeable to income-tax under the head “income from other sources”. There should not be any exempt income other than agriculture income and interest income. It may please be noted that a person who is entitled to use this form shall not use Form ITR-2. Further, a person in whose income the income of other person like his/ her spouse, minor child, etc. is to be clubbed is also not entitled to use this form.

ITR-2

This Form can be used by an individual or a Hindu Undivided family whose total income does not include any income chargeable to income-tax under he head “Profits or gains of business or profession”. It may please be noted that a person who is entitled to use Form ITR-1 shall not use this form. Further, a person who is partner in a firm is required to use Form ITR-3. In case a partner in the firm does not have any income from the firm by way of interest, salary, etc. and has only exempt income by way of share in the profit of the firm shall not use Form ITR-2.

ITR-3

This Form can be used a person being an individual or a Hindu Undivided family who is a partner in a firm and where income chargeable to income-tax under the head “Profits or gains of business or profession” does not include any income except the income by way of any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from such firm. In case a partner in the firm does not have any income from the firm by way of interest, salary, etc. and has only exempt income by way of share in the profit of the firm shall use this form only and not Form ITR-2.ITR-4

This Form can be used by a person being an individual or a Hindu Undivided family who is carrying out a proprietary business or profession.

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ITR-5

This Form can be used a person being a firm, AOP, BOI, artificial juridical person referred to in section 2(31)(vii), cooperative society and local authority. However, a person who is required to file the return of income under section 139(4)(a) or 139(4)(a) or 139(4)(b) or 139(4)(c) or 139(4)(d) shall not use this form.

ITR-6

This Form can be used by a company, other than a company claiming exemption under section 11

ITR-7

This Form can be used by persons including companies who are required to furnish return under section 139(4A) or under section 139(4B) or under section 139(4C) or under section 139(4D).

ITR-8

This Form is applicable in case of a person who is not required to furnish the return of income but is required to furnish the return of fringe benefits

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4) Use of Return Preparation Software - Those citizens who wish to avail the e-filing system need to download the Return Preparation Software - External website that opens in a new window for each ITR form. This software is an excel file that requires one to type in personal details as well as financial information from TDS certificates, bank statements, deductions made and interest statements.

5) Generating an XML file - After keying in the details, check once for accuracy. After you are satisfied, click the 'Generate' button to create your tax return in XML format. This format helps in sharing of structured data across different information systems. Save this XML file on your computer.

6) Register - The next step requires you to Register at the Income Tax website - External website that opens in a new window. Your registered Permanent Account Number (PAN card) has to be entered as your username.

7) Login - After registering, enter your user id and password to login. Click on the relevant form on the left panel and select 'Submit Return'.

8) Upload XML - Browse to select the XML file, which you had generated and saved in Step 3. Click on the 'Upload' button to upload the file.

9) Acknowledgement - After the file is successfully uploaded, acknowledgement details or the ITR-V Form will be displayed. Take a printout of this acknowledgement for your records.

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10) Digital Signature - If your income tax return was digitally signed, then no further paperwork or visit to the income tax office is needed. Here is some information about how to get a digital signature - External website that opens in a new window.

Instructions for filling up FORM ITR-V1. Rule 12(3)(iii) of the Income-tax Rules, 1962 provides that any assessee can file a return of income electronically without the use of a digital signature. In such cases only an acknowledgement needs to be filed with the Department physically by the assessee.2. Once a return of income is filed electronically on successful transmission of the data, Form ITR-V duly filled shall be generated by the Income-tax Department’s server to the assessee. This ITR-V will also contain the acknowledgement number of electronic transmission and the date of the transmission as an evidence of filing for the benefit of the assessee. Please

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down load a copy of such duly filled Form and verify under your signature in the space provided. In case the return was prepared by a Tax Return Preparer (TRP), the particulars of TRP be also filled and this verification form be countersigned by the TRP.3. This acknowledgement in Form ITR-V duly signed by the assessee needs to be filed physically (in duplicate) with the concerned Assessing Officer. One copy of this acknowledgement would be returned back to the assessee for his record.4. The codes for the form number and the status of the assessee shall be generated electronically by the Department’s server.

11) Verification - If your return is not digitally signed, then you need to print and fill up the verification part of the acknowledgement cum verification form (ITR-V). This has to be signed and submitted to the local Income Tax Office within 15 days to complete the e-filing process.

12) Additional Assistance - In case you require any more help in filing the paper copy of the return, please contact the Public Relations Officer at your local Income Tax Office. One may also phone the Aayakar Sampark Kendra (ASK) call centre at 124-2438000 or email at ask@incometaxindia.gov.in.

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Frequently Asked Questions1 Who is liable to file the income-tax return ?2 What is the assessment year ?3 What are the due dates for filing of income tax returns where primary source of

income & 'salary' ?4 Which is the prescribed form for filing of income tax returns for assesses having

income from salary ?5 What are various heads of income ?6 How to pay the tax under the income tax act ?7 What are the rates of income tax?8 How is the penal interest calculated?9

How is interest calculated for late or non-furnishing of return ?

10If the tax payer fails to pay 90% tax plus applicable interest(s), then how is interest for short payment of such advance-tax calculated?

11 How is interest for deferment of advance-tax calculated?12

What are the important points to remember while filing the income tax return?

13Why is father's name even in the case of married lady accesses to be given in the verification portion of the return?

14 Who can verify and sign the income-tax return?15 If the return is not signed by the proper person or if it is unsigned, what is the

legal implication?16 Where to file the income tax return?17 Where to deliver the income-tax return?

Who is liable to file the income-tax return?

When the total income from all sources of income of any person exceeds the maximum amount which is not chargeable to income-tax in any previous year ending on 31st March then that person is liable to file the Income Tax Return.

Section 139(1) of the Income-tax Act has been amended w.e.f. AY 97-98 with a view to bring larger number of persons in the tax net. In order to increase the tax-base now any person who satisfies any one of the six conditions viz. is owner of a vehicle, or, occupies specified floor area of an

47

immovable property or incurs expenditure for himself or any other person on foreign-travel or subscribes to a telephone or Credit Card or is a Club member, then he is required to file a return.

For an individual the maximum limit of income which is not chargeable to tax, for Assessment Years 2001-02 and 2002-2003 is Rs. 50,000 respectively.

Besides such persons, any other person who is to claim a refund, or carry forward losses (for example loss under the head 'Income from property') or who seeks any other benefit (for example, a deduction income of a blind individual) may also file the Income-Tax Return. It is important to note that from the Assessment Year 1993-94 onwards, the return of income has to be compulsorily filed if the income of an individual exceeds the basic exemption limit.

What is the assessment year?

Assessment year is the period of 12 months succeeding the relevant previous year (i.e. the accounting year) ending on 31 st march. for example, a. y. 2002-2003 is for the period of twelve months starting from 1-4-2001 and ending with 31-3-2002.

What are the due dates for filing of income tax returns where primary source of income & ‘salary’?

In the case of an assesses earning income from Salary primarily, the due date for filing the Income Tax return is 30th June of the assessment year. For example, the due date for A.Y. 2002-2003 would be 30 th June 2002.

Which is the prescribed form for filing of Income Tax returns for assesses having Income from salary?

The assesses enjoying salary income, and whose total income does not include income under the head 'Profits and Gains of Business or Professional has to file his income-tax Return in Form No. 3. He can also file the Return in Form No. 2A if his net taxable income is Rs.2.0 lakhs or less and if following conditions are satisfied :-

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a) There is no income from business or profession;

b) There  is  no  brought forward  or  carried  forward loss/allowance under any head of income except from house property.

Accesses fulfilling the above conditions, have the option , of using even the existing Form No. 3 in place of Form No. 2A. They can also file their returns in 'Salary'form. 5

What are various heads of income?

the various heads of income are:

a) Salaries;

b) Income from House Property;

c) Profits & Gains of Business or Profession;

d) Capital Gains, and

e) Income from other sources.

While computing income from the above mentioned different heads, the procedure is:-

First, the taxable income from each source is to be computed under each head of income by allowing deductions, and then they are aggregated. For example, in the case of an assesses deriving income from salary, house property, and Interest income from Fixed Deposit in a Bank, firstly, the taxable income under the head 'salaries', then 'Income from House Property, and lastly the taxable income under the head 'Income from other sources' for Bank interest etc. will be computed.

Thereafter, all the three incomes under the three heads would be aggregated. From this amount, certain eligible deductions would then be deducted to arrive at the net taxable income on which tax is chargeable.

How to pay the Tax under the Income Tax Act?

The employer or his representative making payment to an assesses earning

49

income from 'salary' is under obligation to deduct, certain amount of 'tax, from such payment(s) made during the financial year. Such deduction from the payment is called 'Tax Deducted at Source' i.e. TDS. The person making this TDS is obliged to pay such tax to Central Government within the prescribed time limits.

This payment of TDS to the Central Government is treated as payment of tax on behalf of the assesses.

The assesses may furnish to his employer particulars of his income under any head other than "salary", and of any tax deducted at source thereon in the prescribed Form No. 12C. The employer shall take such other income and tax, if any, deducted at source from such income, into account for the purpose of computing the TDS from his salary income. However, this aggregation is not permitted in case such income under any other head (except loss from house-property) is a loss. This loss (except loss from house-property) is not permissible to be adjusted by the person paying salary but can be claimed as deduction at the time of filing of return and a refund sought.

In order to remove any difficulty in obtaining such refund, the assesses may make an application in Form No. 13 to his Assessing Officer, and, if the Assessing Officer is satisfied that the total income of the tax payer justifies a lower rate of deduction or no deduction at all he may then issue an appropriate certificate to that effect which should be taken into account by the person making the payment of salary while deducting tax at Source.

In case the assessesdoes not wish to furnish particulars of his income under other heads to his employer then he has to estimate his total taxable income under the different heads of income during the previous year, and pay tax thereon during the financial year itself, (after excluding the tax deductible at source), by the due dates specified under the Income-tax Act. These payments are called "Advance Tax Payments".

The due dates and the percentage of installment of Advance Tax for individuals are mentioned herein below :-

Due date of Installments Amount Payable

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1st on or before

15th September. Amount not less than 30% of such advance tax

2nd on or before

15th December. Amount not less than 60% of such advance tax

3rd on or before

15th March. Entire balance amount of such advance tax.

However, the liability for payment of advance tax arises only where the amount of such tax payable by the assesses during that year is Rs.5,000 or more.

Also, any amount paid by way of Advance Tax on or before the 31st March of that year, is treated as Advance Tax Paid during that Financial Year.

After the return is prepared, and the net taxable income finally determined, it may so happen that, after taking into account the amount of TDS and Advance Tax, if any, already deducted/paid still some tax or interest (payable for delay in furnishing the return or delay in payment of advance tax) remains to be paid.

This amount should be paid as 'self-assessment tax 1' before furnishing the r eturn.

It is, therefore, important to note that before furnishing the return, the assessee has to pay the entire .tax and interest, if payable, and the proof of such payment of taxes has to be attached with the return.

It is also to be noted that 'tax' includes applicable Interest' chargeable under various provisions of the LTV, Act, 1961.

What are the rates of income tax?

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In the case of an individual, the rates of Income tax for A.Y. 2001-2002 and A.Y. 2002-2003 are given herein below

1.  Persons in this slab would be required to pay twelve percent surcharge on the total income-tax payable after rebate under Chapter VIII-A.

2.  Persons in this slab would be required to pay two percent surcharge on the total income-tax payable after rebate under Chapter VIII-A.

3.  Persons in this slab would be required to pay seventeen percent surcharge on the total income-tax payable after rebate under Chapter VIII-A.

4.  Persons in this slab would be required to pay two percent surcharge on the total income-tax payable after rebate under Chapter VIII-A.

No surcharge would be payable by persons having incomes of Rs.60,000 or below. Marginal relief is provided to ensure that the additional amount of income-tax payable, including surcharge, on the excess of income over Rs.60,000 is limited to the amount by which the income is more than Rs.60,000 .

However, the amount of Income-tax computed in accordance with the above table would be first reduced by the amount of rebate of Income Tax calculated under Chapter VIII-A of the Income Tax Act (for example: rebate on payment of LIC, Provident Fund etc.). Thereafter, Union surcharge will be calculated and charged.

How is the penal interest calculated?

Where the assessee has defaulted in timely furnishing of his return of income or where he has to pay advance tax, then penal interest is chargeable for Non/Late filing of return or Non-payment/short payment/deferment in payment of such advance tax.

How is interest calculated for late or non-furnishing of return?

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INTEREST U/8. 234-A FOR LATE OR NON-FURNISHING OF INCOME TAX RETURN

For defaults in furnishing 'Return of income': Simple interest @ 1.25% for every month or part of a month from the due date of filing of the return to the date of furnishing of the return. The interest is calculated on the amount of the tax on the total assessed income as determined under subsection (1) of section 143 or on regular assessment u/s 143(3) as reduced by the Advance Tax, if any, paid and any tax deducted or collected at source.

If the tax payer fails to pay 90% tax plus applicable interest(s), then how is interest for short payment of suuch advance-tax calculated?

INTEREST U/S. 234-B FOR SHORT PAYMENT OF ADVANCE TAX

Shortfall in payment of Advance tax of more than 10%

Simple interest @ 1.25% for month or part there of  is  chargeable w. e. f. 1st April of the Assessment Year to the date of determination of income u/s. 143(1) or regular assessment u/s 143(3) on the assessed tax.

"Assessed tax" means the tax on the total income determined under subsection (1) of section 143 or on regular assessment u/s 143(3), a reduced by the amount of tax deducted or collected at source.

How is interest for deferment of advance-tax calculated ?

 

INTEREST U/8. 234-C FOR DEFERMENT OF ADVANCE TAX

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1. If no advance tax is paid or the advance tax paid in 1 st instalment on or before 15 th September is less than 30% of the tax payable on threturned income as reduced by taxes deducted at source

Simple interest @ 1.25%p,m. is chargeable on the amount of shortfall for a period of 3 months

2.   If no advance tax is paid or if the advance tax paid in 2nd instalment on or before 15th December  is  less  than  60% inclusive of 1 st instalment of the  tax  payable on the returned income as reduced by taxes deduced at source

Simple interest @1.25% p.m. is chargeable on The amount of shortfall For a period of 3 months

3.   If the advance tax paid on the   current   income   on   or before the 15 th day of March is less than the tax due on the returned income

Simple interest @ 1.25% on the amount of the short fall from The tax due on the returned income.

However, no interest is leviable if the short-fall in payment of advance-tax is on account of under estimation of the amount of capital gains or any income from winnings from lotteries, crossword puzzles, races, and other games including an entertainment program on television or electronic mode, in which peole compete to win prizes etc., and the assesses has paid the tax on such income as part of the remaining instalment of advance tax which are due or if no instalment is due, by 31st March, of the Financial Year.

What are the important points to remember while filing the income tax return?

Income Tax Return is a legal document and it should be filled in by the assessee with due care and caution. There should be no corrections or

54

overwriting and it should be properly signed and verified by the person who is authorised to do so under the provisions of I.T. Act, The following important points may be taken care of while filling up the Income Tax Return:-

a) Name & Address :-

The name and address must be written in block letters and while filling up the same in the cages meant for the same, one cage may be left blank after each word. As the Income-tax Returns are to be generally filed on the basis of territorial jurisdiction, any mistake in the address may dislocate the return which will cause undue delay in finalisation of the assessment.

b) Assessment Year:

The Assessment Year is to be correctly filled in as the Financial Year succeeding the year for which the income is accounted.

c) Revised Return :

Proper particulars of the original return are to be mentioned in case the I.T. return is a revised return.

d) P.A.N/GIR Number :

The assessee's PAN/GIR Number should be correctly filled so that the return reaches the concerned Assessing Officer.

e) Status :

Correct code numbers of the assessee's status i.e. individual, H.U.F., Firm, Company, B.O.I., A.O.P. etc. and residential status i.e. Resident in x India or Not Ordinarily Resident in India ( complete details of stay in India ought to be attached) must be filled in as per the Notes attached to the Income Tax Return.

f) Evidence(s) for Pre-paid Taxes :

The original T.D.S. certificates and challans for payments of advance tax and self assessment tax should be attached to the I.T. return and proper details are to be furnished under the head Statement of Taxes. These

55

documents may be listed under the head: List of Documents/Statements attached.

g) Document(s)/Annexure(s) Attached :

The other document(s)/Annexure(s) may be properly listed under the head List of Document(s)/Statement(s) attached and the total number of documents must be properly filled in the relevant column of the Acknowledgement Form.

h) Income Claimed Exempt :

The particulars of income which is not included under any head of income and claimed as exempt from tax must be mentioned in the relevant part of the I.T. Return under the head 'Income Claimed Exempt',

i) Verification :

The verification must be signed by the authorised person and other particulars viz. Name, Father's Name (not husband's name), Assessment Year, Capacity, Place and Date should be correctly filled therein. Please note that any person making a false statement is liable to be prosecuted under Section 277 of the Income-Tax Act.

Why is Father's name even in the case of married lady assessees to be given in the verification portion of the return?

This is required for proper identification, as in the PAN Forms, the requirement is to fill up the father's name, to ensure a PAN for life.

Who can verify and sign the income-tax return?

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The individual filing his Income Tax return has to sign the return. In case the individual is mentally incapable, then the return may be signed by his Guardian or by any other person competent to sign on his behalf.

In case the individual is absent from India or because of any other reason he is not able to sign and verify his return of income, then any person duly empowered by him through valid Power of Attorney may sign on his behalf. In such case, a certified copy of the Power of Attorney must accompany the return.

If the return is not signed by the proper person or if it is unsigned, what is the legal implication?

It is then an invalid return.

Where to file the income tax return?

An existing assessee must file his Income Tax return with the Assessing Officer who had previously assessed him or with the Assessing Officer where his case stands transferred.

Normally, there are separate wards for the assessees earning income from salary. These wards/circles, have been assigned separate jurisdiction for separate classes of assessees, like assessees deriving salary income from Government or from- private employers. Similarly, the assessees deriving Income less than Rs.10 lacs may be assessed in a 'Ward' whereas the assessees deriving income above Rs.10 lacs may be assessed in a 'Circle 1 .

A new assessee should file his Income-tax Return with the Assessing Officer having territorial jurisdiction over the area where he resides, or the Assessing Officer having special jurisdiction over the specific assessee or class of assessees or class of income.

In case of any doubt, the I.T.O. (Public Relations) or the I.T.O. (Headquarters) may be contacted to know the jurisdiction for filing the Income-Tax Return.

Where to deliver the Income-Tax return?

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The Income-Tax Return may be delivered either at the Dak Receipt Counter in the Range/Ward/Circle having jurisdiction over the assessee or the return may be sent through registered post.

When the return is delivered at the Dak Counter, the official manning the counter returns one copy of the acknowledgement form attached with the return after signing, stamping, and numbering it. The date of filing the return is also prominently displayed on the acknowledgement handed over to the assessee.

SUMMARY AND CONCLUSION

SUMMARY OF LEARNINGS EXPERIENCE• To get initial success in this field is very difficult. Although the business generation becomes easier with time as we serve more people who then get added up in the loyal clientage. Thus time and service are two most factors to get in this field.

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• Also the corporate remains a very important segment which gets business in bulk but retail cannot be ignored which makes your business ticking.• Customer remains in the pivotal position.

CONCLUSION:Under the umbrella of my project, we the participants of this project were glad to understand the design and pattern of income tax e-filing online. My experience with the various customers of the various companies was totally different and gave us an edge adding to my knowledge.

BIBLIOGRAPHY:

Websites:www.incometaxindiaefiling.gov.in

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www.valueplus.njfundz.comwww. incometax india.gov.in www.legalserviceindia.comwww.finance.indiamart.com

Reference books:1. BASIC PRINCIPLES OF INCOME TAX LOWS 2. HOW TO SAVE YOUR TAX3. BASIC INCOME TAX TIPS

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