It is that time of the year, when every taxpayer from the salaried class to high net-worth individuals, is on 'high-alert'. The simple formula is to file your tax returns, and breathe easy. And it is best done on time.
Sunday, March 31 is the absolute last chance for you to file your tax returns for the financial year 2010-11 (assessment year 2011-12) with a maximum penalty applicable. For assessment year 2012-13, the penalty is less. And if you are in the happy position of being up-to-date, this is the time to maintain that unblemished record.
If you are a salary-earner whose tax is deducted at source, the last date to file returns for FY 2012-13 is July 31.
"An ITR must be filed before the due date for avoiding penalties and the assessee should make true and complete disclosure of income from all sources in the ITR," says chartered accountant Abhishek Aneja.
Following finance minister P Chidambaram’s advice to the I-T department for a non-adversarial tax regime, the emphasis now is more on eliciting taxpayer compliance, rather than cracking down on them.
Both I-T offices and banks have announced that they will remain open on March 30 and 31.
Income Tax basics: frequently asked questions
When is a person required to file income-tax returns (ITR)?
An Individual taxpayer is required to furnish his or her return of income if the person’s gross taxable income --- ie, total income under all five heads of income before claiming exemptions, exceeds the basic exemption limit for the relevant assessment year.
What happens if you don't file your ITR?
Interest is applicable for late deposit of taxes, and failure to file — or delay in filing — returns invites a penalty of R5,000. Penalty for evasion of taxes @100%-300% may also be imposed by the income tax officer, in addition to tax payable.
How many years of backdated returns can you file?
Only one year from the end of the relevant assessment year. For 2011-12, the assessment year will be 2012-13. For 2012-13 assessment y ear, you are in any case required to file your returns before March 31, 2014.
What is an assessment year?
This is the financial year subsequent to the one for which the income pertains. If 2011-12 is the financial year, 2012-13 is the assessment year.
How does the I-T department select cases where penalties are imposed?
An I-T officer may detect non-compliance such as not filing returns within the deadline, or not disclosing the full income. He issues a show-cause notice to the taxpayer, and if he is not satisfied with the explanation, may issue a penalty order under the relevant section of the Income Tax Act.
How do you claim a tax refund?
A refund can be claimed by filing the return of income, which is then processed by the I-T department and refunds are issued where more tax has been paid than required under law.
Will you be penalised if you have paid all taxes through TDS (tax deduction at source) but have not filed returns?
The return is required to be filed even if the TDS has been deducted by the employer, failing which you may be penalised. However, the Central Board of Direct Taxes has exempted a certain class of salaried tax payers from filing returns for AY 2012-13 subject to some conditions.
In exceptional cases, the assessee may move the tax department to reduce/waive the penalty for concealment of income, which would be handled by the pertinent income-tax commissioner. He may also apply to the Central Board of Direct Taxes to be permitted to file returns late, which would be at the discretion of the department.
If you have not filed returns for some years, how can you bring your tax file up to date?
The I-T Act permits belated filing of returns only up to a period of one year. If one has failed in this for reasons beyond one's control, an assessee may apply to the CBDT for leniency, which the CBDT may or may not accept.
What is advance tax? Is it only for companies or for individual assessees as well?
Advance tax is based on the 'pay-as-you-earn' concept. It is payable on current income, in installments, during the earning year (the year preceding the assessment year). It is payable if the tax liability after adjusting TDS etc exceeds R10,000, and is applicable for all types of assessees.