31st July seems to be the day, which all individual taxpayers dread because it is the last day to deal with all those complicated forms and file your tax returns. The first thing, one needs to have to file income tax returns is a Permanent Account Number (PAN).
If you don’t have one, click here apply for one. It takes about 10-15 days to get a PAN.
Who must file tax returns?
Now the eligibility to pay tax and file returns is different for men, women and senior citizens. If a man's annual income is more than a lakh, he needs to pay tax on the exceeding income, depending on his level of income. Women are eligible to pay tax, only if their yearly income exceeds Rs1,35,000 and the tax-exemption for senior citizens is Rs 1,85,000.
According to the latest amendments in the income tax law, you need to file your return only if you have a taxable income. This is an amendment compared to the earlier requirement of fulfilling a one-by-six criteria to file tax returns.
Which form to fill?
People who don't have business income can fill up form 2D, 2F or 2E. Of these, 2D is the simplest form that everyone, except companies, can use for filing tax returns. The Central Board of Direct Taxes (CBDT) has set up help centres in over 300 cities to assist in filing of returns.
In case of senior citizens: Rs.1,85,000
In case of young ladies (all ladies below the age of 65): Rs.1, 35,000
In case of others: Rs.1, 00,000
What documents to attach?
A. Statement of Income (not mandatory)
The next thing to do is to prepare a statement of income for the previous year and show how you computed tax on it. This document helps to prevent deletions or overwriting, while filing your returns. A copy of this statement should also be preferably enclosed with the returns you file. However, if you can fill in all the details in your form itself, then this statement is not required. But as Partner, Kanu Doshi Associates, Ameet Patel says, it is always advisable to attach this copy.
B. Form 16
As a salaried individual, at the end of the month, you would want the amount, which you were promised at the time of appointment. But if you look closely at your pay slip, the taxman has already taken his share. The employer, on behalf of the taxman, deducts as certain amount as Tax Deducted Source (TDS).
You should have a certificate from your employer detailing that the tax has been deducted at source on your income for the year. Form 16, as it is called, is an important document; so if you haven’t got it, ask for it. While filing your tax returns, you must attach Form 16 (in original) as proof that your employer has deducted tax at source, to prevent any double payment of tax.
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C. Proof of investments
To get the maximum tax benefit, many of you may have invested your money in various instruments like Public Provident Fund (PPF), NSC (National Security Certificate), Equity Linked Savings Scheme (ELSS), life insurance premium, pension funds offered by mutual funds and so on. If your company has not taken these investments into consideration, while deducting tax at source, you need to attach the documents proving your investments. You can then either claim a rebate or will have to pay tax on returns, depending on the scheme.
Tax and investment consultant, Subhash Lakhotia said, “Please do remember that when you go now to file your income-tax return for the financial year 2005-2006, no standard deduction would be granted to salaried employees. Thus, this is an important point to be taken care of by all salaried employees, so that they do not claim standard deduction, while filing their income tax return for the year ending on March 31, 2006.”
Where to submit return?
Since there is no extension of date to file your returns, all salaried individuals must go to the nearest IT office, ask the public relations officer, PRO, about the jurisdiction and find out where to submit the documents. The income tax authorities have said that special counters would be opened from July 28 to meet the eleventh hour rush of tax filers.
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