Now that FY 10–11 is done and dusted, we should turn our attention to filing of the tax return for the same. Essentially, we have till July 31 to file the tax return. Yet, many of us will wait till the last minute and then perhaps hope for an extension of the date. Basically, this is to do with the human tendency of procrastinating. Towards this end, this article discusses how simple the tax return preparation process really is.
First of all, a taxpayer need not file a tax return unless his or her income is above `1,60,000. For ladies this limit is `1,90,000 and for senior citizens (65 years and above), the limit is `2,40,000. In other words, if your total income is below this basic exemption, there is no legal requirement to go through the entire return filing process. As far as the current year’s tax return is concerned, all you need to know is whether you have a taxable income above the basic exemption limit or not What is taxable income?
Which brings us to the next question --- what is exactly meant by taxable income?
Taxable income implies the gross amount of income that you earn before claiming any deductions. For Example, say Mr Joshi, a senior citizen, earns an income of `3,00,000. During the year,he invests `70,000 in PPF thereby, bringing his income down to `2,30,000. Now, even if `2,30,000 is below the basic exemption of `2,40,000, Mr Joshi will have to file his tax return since his gross income of `3,00,000 was above the threshold limit.
Sources of income
There are basically five heads of income that any person can earn income from. These five heads are exhaustive, which means that there is no other source apart from these five from which you can earn any income.
1. Income from salary;
2. Income from house property;
3. Income from business and profession;
4. Income from capital gains;
5. Income from other sources.
So basically, the tax return filing process can be reduced to filling in the details of income at the appropriate space in the tax return. For persons earning a salary, the employer provides a form known as Form 16 that gives full details and break-up of the salary income. The same can be used to fill in the details in the form.
Income from house property implies the rental income that a landlord may derive from his or her property. As far as business or professional income is concerned, the net income remaining after deducting expenses incurred for running the business is subject to tax.
Capital gains are earned when you sell mutual fund units or shares,House or any other capital asset. Currently, long-term capital gains from equity shares and units of equity mutual funds are exempt from tax, whereas the short-term gains are taxed at 15 per cent.
The last head is the residuary head which basically includes interest income that you earn such as Bank FD interest, interest from the RBI bonds, etc. It must be noted that apart from interest on PPF and Post office saving Bank account (up to 3500/-PA), all other interest from whichever source is fully taxable.
An aggregation of all the above incomes should be above the basic exemption limit for you to be liable to pay taxes or to file a tax return. The rate of tax depends upon your level of income as per the applicable slab.
Return filing process
Now, I come to the return filing process. On a basic level, it comes down to entering the figures as applicable to your income source in the space provided for the same.
Earlier, the tax authorities were not satisfied with the mere mention of the figure; they needed to know the computations leading to the above figure. This had to be provided by way of a separate annexure and the tax return on account of the annexures became quite bulky and complicated. Also, each person used to attach his or her own version of the annexures leading to inconsistencies in the tax return even in respect of similar income heads. Tax officers used to spend time and resource in calling for documents and information that needed to be submitted along with the return in the first place.
Now, in the new regime, taxpayers are categorised into eight types based on their nature of income.(See the table below)You will notice that for most senior citizens, the newly introduced form SAHAJ, will be required. All the forms come with clear cut instructions as to how to fill them and in most cases, you would not even require professional help. It is literally as simple as filling in the blanks. The ITR Forms Fy 2010-11 (Ay 2011-12) can be downloaded from Link. You are advised to download and go through the form in order to familiarize yourself with the same.
As mentioned earlier, these new forms do not require taxpayers to provide any additional information by way of annexures. In fact, no documents of any sort, even the Form 16, need be attached. The ITR form has to be submitted simply as it is, only with the information appropriately filled up. As you can see, the process of filing tax return is really straightforward and totally hassle free. The key thing is to ensure that you start early and have time on your side. So, start today!
Link to download E filing software is Given below.
Link to download E filing software is Given below.
|Sl. No.||Form Name||Instructions||Form Description|
|1||AY 2011-12 Income Tax Return ITR-1 Form Notification||AY 2011-12 Income Tax Return Forms Notification under Rule 12|
|3||ITR-1(sahaj)||For Individuals having Income from Salary & Interest,Income from one house|
|4||ITR-2||For Individuals & HUFs not having Income Business or Professionfrom|
|5||ITR-3||For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship|
|6||ITR-4||For Individuals & HUFs having income from a proprietory business or profession|
|7||ITR-4 S(Sugam)||For Individuals/HUF having income from presumptive business|
|7||ITR-5||For firms, AOPs,BOIs and LLP|
|8||ITR-6||For Companies other than companies claiming exemption under section 11|
For persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 13(4C) or section 139(4D). (Not available for e-Filing)
|Which Form is Applicable|
For Individuals, HUF
For Firms, Associations of Persons (AOP), Body of Individuals (BOI), Local Authority, Companies, Trusts, Fringe Benefit Tax (FBT) Return
#Note: ITR-7 will not be available for e-Filing.
#Note: ITR-8 is discontinued for e-Filing from AY2010-11 onwards, still continued for AY2007-08,2008-09,2009-10.