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Saturday, July 27, 2013

CBDT - filing of Income tax returns - need for e-filing.... !

Some say that ‘tax and death’ are inevitable…. As a good and responsible citizen, it is our bounden duty to pay our taxes promptly….there are direct and indirect taxes and for those of us – whose life entirely dwells on going to work, looking eagerly for the salary day, overspending whatever is earned – in the month of March struggle for making tax savings and come July, file our tax returns without fail….

The Central Government has been empowered by Entry 82 of the Union List of Schedule VII of the Constitution of India to levy tax on all income other than agricultural income. The Income Tax Law comprises The Income Tax Act 1961, Income Tax Rules 1962, Notifications and Circulars issued by Central Board of Direct Taxes (CBDT), Annual Finance Acts and Judicial pronouncements by Supreme Court and High Courts. The Government of India imposes an income tax on taxable income of all persons including individuals, Hindu Undivided Families (HUFs), companies, firms, association of persons, body of individuals, local authority and any other artificial judicial person.  The CBDT is a part of Department of Revenue in the Ministry of Finance. On one hand, CBDT provides essential inputs for policy and planning of direct taxes in India,at the same time it is also responsible for administration of direct tax laws through the Income Tax Department.

Sure you have received the form 16 – the essential document issued by Employer detailing salary, tax incidence and the amount of tax deducted from your salary at source.  There can be two categories – those whose assessable income is less than 5 lakhs and above 5 lakhs.  The Central Board of Direct Taxes (CBDT) earlier in May this year made the E-filing of income tax return compulsory. The rule is applicable starting the assessment year 2013-14 for persons having total assessable income exceeding Rs.5 lakh. More importantly, unlike the past two years, salaried persons earning up to Rs.5 lakh annually will have to file income tax returns, CBDT said.

The CBDT had exempted salaried employees having total income of upto Rs.5 lakh including income from other sources upto Rs.10,000 from the requirement of filing income tax return for assessment year 2011-12 and 2012-13, respectively. "The exemption was available only for the assessment years 2011-12 and 2012-13...the exemption provided during the last two years is not being extended for assessment year 2013-14," the CBDT said in a statement.

To put it simply – every one with assessable income taxable will have to file their return …….. for those with income above Rs.5 lakhs, e-filing is mandatory.  It is not too cumbersome; for filing returns, an assessee can transmit the data in the return electronically by downloading ITRs, or by online filing ~ and it does not stop there.  After filing electronically, the assessee should  submit the verification of the return from ITR-V for acknowledgement after signature to Central Processing Centre.



In the past, the special counters operated from IT Offices in Chennai, Mumbai and Delhi…. But don’t leave it until the proverbial 11th hour and rush for paying it on the last day.   Some basic steps to be remembered are :

          Do not use your Office e-mail address on ITR from, preferable to have your personal ID for reference
          Never hide any income – pay tax at your slab for all that you receive from various sources [if any]
          Make sure that you mention the income arising out of sale of house property; rent received; interest earned etc.,
          Collect all the relevant documents from the  financial institutions where you have taken loan / placed deposit etc.,

When you file your returns electronically, you would immediately get a confirmatory mail from the Income Tax department at your registered mail id.  You are required to verify, print and sign the acknowledgement [ITR-V] and send it by Ordinary Post Or Speed Post  Only within a period of 120 days from the date of transmitting the data electronically, to the address as mentioned below.  The Dept will not accept ITR-V sent by Registered Post or Courier. Further,  ITR-V will not be received in any other office of the Income-tax Department or in any other manner. The address to which the acknowledgement is to be sent is :

Income Tax Department - CPC,
Post Bag No – 1,
Electronic City Post Office,
Bangalore – 560100.

Tailpiece: Only for the salaried income, who are overtly worried about their income and the taxes deducted.  Indian Express recently had this newsitem stating that the CBDT has launched an inquiry into a contentious income-tax order which dismissed a tax demand of Rs 980 crore on now-jailed Haryana politician Gopal Goyal Kanda and his business ventures, including the MDLR Group. The inquiry is also expected to look into the sequence of events leading to the tax demand being dismissed as it was categorised as "collectable" in February 2010, shifted to the "difficult-to-recover" category a month later before being completely dismissed in March 2012.

With regards – S. Sampathkumar.

27th July 2013.

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