Tax Filing: Avoid the glitches!

My nephew, Adi, aged 23 Yrs was all excited when he approached me, for he was filing taxes for the first time! I was only intrigued to figure out what the hoopla was all about, he quickly came up with some interesting inundates. “know what”, the young man said, “I feel responsible for the country, I am paying taxes and contributing to the country’s development!”. “I don’t want to get a thing wrong, don’t want to run hither and thither in the last moment.”

I was indeed proud that at such a young age, he was more organized than most of older brethren, infact Adi’s father always did the eleventh hour preparation, like most of the other individuals we come across. I was more than willing to fill him with the nuances of tax filing.

Know the last minute to avoid it!

For any project in life, it is best to be prepared early on – this holds good for tax filing as well, infact tax planning is another arena where individuals await the last call for proofs and then consider saving taxes. Now, to avoid the last minute rush, it becomes pertinent to know the last dates applicable.

The last date for filing return of income for the year ended March 31, 2009 is July 31, 2009 (Salaried and non-tax audit cases) and for individuals who are required to get their books of accounts audited under the Income Tax Act, 30 September 2009.

File your documents, before filing your returns

Apart from the form 16 issued by the company, there are couple of other documents which would be pertinent. Here’s a brief list of what would be required to conduct your tax filing –

· Form 16 (received from employer/s)

· PAN Copy

· Form 16A (Where TDS has happened incase of Term Deposits, Consultant Income)

· Summary of all bank statements

· Details of Capital Gains, Rental Income

If you have business / consultant income and claiming certain expenses, then the vouchers / bills should be in place.

Missed your proof submission deadline – Not late as yet

Being painfully lazy, some people tend to miss their deadline for submission of tax proofs and others could have genuine reason, don’t get panicky just yet – one can still claim the benefit and refund thereof. Re-compute your tax liability while filing return of income and attach the relevant proofs thereof. This is applicable for both Exemptions and Deductions.

Don’t lose your mind over lost Form 16

It is always a herculean task to get duplicates issued, it’s no different for Form 16. Form 16 is an important document, handle it carefully, but if someone were to lose the same, simply request the HR / Finance team to issue a duplicate – the written request should be on an indemnity bond.

Applicable ITR

With the advent of new income tax return forms based on nature of income earned during the year, one needs to know relevance of each return form and select the right ITR as applicable. For an individual, four forms are applicable based on the sources of income, the details of which are as under:

Form No.	Applicability
ITR 1	Meant for Individuals, who have
	- Income from salary
	- Interest income (taxable / exempt)
	- Family pension
	- Income from agricultural activities
ITR 2	Individuals / HUF not having any income on account of carrying out business / profession or on account of being a partner in a partnership firm.
ITR 3	Individuals / HUF who are partner in a partnership firm and does not carry out any other separate business / profession.
ITR 4	Individuals / HUF who is carrying out business / profession under a proprietary concern.

During the current budget, the Finance Minister hinted that Tax filing would be made simpler by re-introducing Saral, this would be a welcome move.

Preserve the filed documents

The acknowledgement that you receive from the IT department after stamping is an important document – these are the documents which are to be preserved –

· Detailed calculation of taxable income and amount of tax payable / refundable

· Advance Tax / Self Assessment Tax Challan

· Copy of documents concerning sale of investments & properties, bank statements etc.,

· Income Tax Returns Acknowledgment

My nephew was a happy lad, for he had devoured ample information, as he prepared to leave, he glanced back to ask, “Is it a legal obligation to file for taxes?”. I had indeed forgotten to mention that it was a legal obligation to file your taxes, however, only if your taxable income exceeds the basic exemption limit - For FY 2008 – 09 - Male Assessee – Rs. 1.5 Lakh; Female – Rs. 1.80 Lakh; Senior Citizen (above 65 Yrs) – Rs. 2.25 Lakh. If your income has been lower than the stipulated amount then you can lay back and relax!

As an afterthought, Adi added, “Oh! In that case, I don’t have to worry this year!”