Services

• Tax planning & advising clients on tax related matters.
• Tax assessments including filling of Income Tax Returns, Filing of TDS Returns.
• Appeals involving filing and appearing before appellate and tribunals.
• Registration
• E-filing of returns
• Assessments
• Audit
  

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What is Income Tax Return?

It is a prescribed form through which the particulars of income earned by a person in a financial year and taxes paid on such income are communicated to the Income-tax Department. Different forms of returns of income are prescribed for filing of returns for different Status and Nature of income.

What are benefits of filing Income Tax Return?

Filing of return is your duty and earns for you the dignity of consciously contributing to the development of the nation. Apart from this, your income-tax returns validate your credit worthiness before financial institutions and make it possible for you to access many financial benefits such as bank credits, etc.

Will I be put to disadvantage by filing my return?

No, on the contrary by not filing your return in spite of having taxable income, you will be liable to the penalty and prosecution provisions under the Income-tax Act.?

What are the different Heads of Income?

Income from Salary-Sec 17 of the Income-tax Act defines the term salary. However, not going into the technical definition, generally whatever is received by an employee from an employer in cash, kind or as a facility [perquisite] is considered as salary.

Income from House Property-Rental income in the hands of owner is charged to tax under the head Income from house property.

Income from Business & Profession- Covers the profits of business & profession.

Income from Capital Gain- Any profit or gain arising from transfer of a capital asset during the year is charged to tax under the head Capital Gains.

The taxability of capital gain depends on the nature of gain, i.e. whether short-term or long-term. Hence to determine the taxability, capital gains are classified into short-term capital gain and long-term capital gain. In other words, the tax rates for long-term capital gain and short-term capital gain are different. Similarly, computation provisions are different for long-term capital gains and short-term capital gains.

Income from Other Sources-Any income not covered above or the specified list of income as stated in the Income Tax Acct are coveredhere.

What are Due Dates of filing Income Tax Return? Sec 139(1)

Due date of filing of return of income

If I fail to furnish my Return within the due date will I be fined or penalized?

Yes, if you have not furnished the return within the due date, you will have to pay interest on tax due. If the return is not filed up to the end of the assessment year, in addition to interest, a penalty of Rs. 5,000 shall be levied under section 271F

Can a Return be filed after the due date?

If ROI could not be furnished within the due dates enumerated u/s 139(1), then it can still be filed at any time:-

Within a period of one year from end of relevant A.Y

Or

Before completion of assessment

Whichever is earlier

Return filed after the prescribed due date is called as a belated return. A belated return attracts interest and penalty as discussed in previous FAQ.?

E.g., In case of income earned during FY 2015-16, the belated return can be filed up to 31stMarch, 2018. However, if return is filed after 31st March, 2018, penalty under section 271Fcan be levied

If I have committed a mistake in the original return, am I permitted to file a Revised Return?Sec 139(5)

Yes, provided the original return has been filed before the due date and the Department has not completed the assessment. It is expected that the mistake in the original return is of a genuine and bona fide nature and not rectification of any deliberate mistake. However, a belated return (being a return filed after the due date) cannot be revised.

Return can be revised within a period of one year from the end of the relevant assessment year or before completion of the assessment whichever is earlier.

E.g., In case of income earned during FY 2015-16, the due date of filing the return of income (considering no audit) is 31st July, 2016. If the return of income is filed on or before 31st July, 2016 then the return can be revised up to 31stMarch, 2018(assuming assessment is not completed by that date). However, if return is filed after 31st July, 2016, then it will be a belated return and a belated return cannot be revised.

Any person who after filing ROI u/s 139(1) or ROI in response to a notice u/s 142(1) If discovers any omission or wrong statement in such ROI filed earlier, then such person can file a revised return u/s 139(5) at any time:-

Within a period of one year from end of relevant A.Y

Or

Before completion of assessment

Whichever is earlier.

Revised Return replaces the original return in all aspects, except the date of filing ROI.

Why is Return filing necessary when all my taxes and interest have been paid and there is no refund due to me?

Amounts paid as advance tax and withheld in the form of TDS or collected in the form of TCS will take the character of your tax due only on completion of self-assessment of your income. This self-assessment is intimated to the Department by way of filing of the return of income. Only then the Government assumes rights over the taxes paid by you. Filing of return is critical for this process and, hence, has been made mandatory. Failure will attract levy of penalty.??

What is Form 26AS?

A taxpayer may pay tax in any of the following forms:

(1) Tax Deducted at Source (TDS)

(2) Tax Collected at Source (TCS)

(3) Advance tax or Self-assessment Tax or Payment of tax on regular assessment.

The Income-tax Department maintains the database of the total tax paid by the taxpayer (i.e., tax credit in the account of a taxpayer). Form 26AS is an annual statement maintained under Rule 31AB? of the Income?-tax Rules disclosing the details of tax credit in his account as per the database of Income-tax Department. In other words, Form 26AS will reflect the details of tax credit appearing in the Permanent Account Number of the taxpayer as per the database of the Income-tax Department. The tax credit will cover TDS, TCS and tax paid by the taxpayer in other forms like advance tax, Self-Assessment tax, etc.

Income-tax Department will generally allow a taxpayer to claim the credit of taxes as reflected in his Form 26AS.

What is TDS?

Tax deducted at source (TDS), as the very name implies aims at collection of revenue at the very source of income. It is essentially an indirect method of collecting tax which combines the concepts of pay as you earn and collect as it is being earned.Its significance to the government lies in the fact that it prepones the collection of tax, ensures a regular source of revenue, provides for a greater reach and wider base for tax. At the same time, to the tax payer, it distributes the incidence of tax and provides for a simple and convenient mode of payment.

The concept of TDS requires that the person on whom responsibility has been cast, is to deduct tax at the appropriate rates, from payments of specific nature which are being made to a specified recipient. The deducted sum is required to be deposited to the credit of the Central Government. The recipient from whose income tax has been deducted at source, gets the credit of the amount deducted in his personal assessment on the basis of the certificate issued by the deductor.

Due Dates for depositing TDS

Forms for submitting Quarterly Statements of Tax Deducted at Source (Rule 31A)

(a) Statement of deduction of tax under section 192 in Form No. 24Q

(b) Statement of deduction of tax under sections 193 to 196D in:

1. Form No. 27Q in respect of the deductee who is a non-resident not being a company or a foreign company or resident but not ordinarily resident; and
2. Form No. 26Q in respect of all other deductees.

Due Dates for submitting Quarterly Statements of Tax Deducted at Source (Rule 31A)

What is Rebate u/s 87A and who can claim it?

An individual who is resident in India and whose total income does not exceed Rs. 5, 00,000 is entitled to claim rebate under section 87A. Rebate under section 87A is available in the form of deduction from the tax liability. Rebate under section 87A will be lower of 100% of income-tax liability or Rs. 2,000. In other words, if the tax liability exceeds Rs. 2,000, rebate will be available to the extent of Rs. 2,000 only and no rebate will be available if the total income (i.e. taxable income) exceeds Rs. 5, 00,000.

What is Tax Audit?

The dictionary meaning of the term "audit" is check, review, inspection, etc. There are various types of audits prescribed under different laws like company law requires a company audit, cost accounting law requires a cost audit, etc. The Income-tax Law requires the taxpayer to get the audit of the accounts of his business/profession from the view point of Income-tax Law.

Section 44AB gives the provisions relating to the class of taxpayers who are required to get their accounts audited from a chartered accountant. The audit under section 44AB aims to ascertain the compliance of various provisions of the Income-tax Law and the fulfillment of other requirements of the Income-tax Law. The audit conducted by the chartered accountant of the accounts of the taxpayer in pursuance of the requirement of section 44AB�is called tax audit.

The chartered accountant conducting the tax audit is required to give his findings, observation, etc., in the form of audit report. The report of tax audit is to be given by the chartered accountant in Form Nos. 3CA/3CBand 3CD.?

Who are compulsorily required to get their accounts audited?

As per section 44AB, following persons are compulsorily required to get their accounts audited:

• A person carrying on business, if his total sales, turnover or gross receipts (as the case may be) in business for the year exceed or exceeds Rs. 1 crore.
• A person carrying on profession, if his gross receipts in profession for the year exceed Rs. 25 lakhs.
• A person who is eligible to opt for the presumptive taxation scheme of section 44AD(presumptive taxation) but he does not opt for the same and claims the profits or gains for such business to be lower than the profits and gains computed as per the presumptive taxation scheme of section 44AD and his income exceeds the amount which is not chargeable to tax.
• A person who is eligible to opt for the presumptive taxation scheme of sections 44AE but he does not opt for the same and claims the profits or gains for such business to be lower than the profits and gains computed as per the presumptive taxation scheme of sections 44AEE.
• A person who is eligible to opt for the taxation scheme prescribed under section 44BB or section 44BBB but he does not opt for the same and claims the profits or gains for such business to be lower than the profits and gains computed as per the taxation scheme of these sections.

Section 44BB is applicable to non-resident taxpayers engaged in the business of providing services or facilities in connection with, or supplying plant and machinery on hire basis to be used in exploration of mineral oils. Section 44BBB�is applicable to foreign companies engaged in the business of civil construction or erection of plant or machinery or testing or commissioning thereof, in connection with a turnkey power project.

What is 3CA/3CB & 3CD?

The report of the tax audit conducted by the chartered accountant is to be furnished in the prescribed form. The form prescribed for audit report in respect of audit conducted under section 44AB? is Form No. 3CB and the prescribed particulars are to be reported in Form No. 3CD.

In case of persons who are required to get their accounts audited by or under any other law, the form prescribed for audit report is Form No. 3CA and the prescribed particulars are to be reported in Form No. 3CD.?

What is the due date by which the taxpayer should get its accounts audited?

A person covered by section 44AB should get his accounts audited and should obtain the audit report on or before the due date of filing of the return of income, i.e., on or before 30th September (*) of the relevant assessment year.

What is utility of PAN?

PAN enables the department to link all transactions of the assesse with the department. These transactions include tax payments, TDS/TCS credits, returns of income, specified transactions, correspondence and so on. It facilitates easy retrieval of information of assesse and matching of various investments, borrowings and other business activities of assesse.

What are the benefits of obtaining PAN or PAN Card?

A Permanent Account Number has been made compulsory for every transaction with the Income-tax Department. It is also mandatory for numerous other financial transactions such as opening of bank accounts, availing of institutional financial credits, purchase of high-end consumer items, foreign travel, transaction of immovable properties, dealing in securities, etc. A PAN card is a valuable means of photo identification accepted by all Government and non-Government institutions in the country.?

Who has to obtain a PAN?

PAN is to be obtained by following persons:

• Every person if his total income or the total income of any other person in respect of which he is assessable during the previous year exceeds the maximum amount which is not chargeable to tax.
• A charitable trust who is required to furnish return under Section 139(4A)
• Every person who is carrying on any business or profession whose total sale, turnover, or gross receipts are or is likely to exceed five lakh rupees in any previous year
• Every importer/exporter who is required to obtain Import Export code
• Every person who is entitled to receive any sum/income after deduction of tax at source
• Any person who is liable to pay excise duty or a producer or manufacturer of excisable goods or a registered person of a private warehouse in which excisable goods are stored and an authorized agent of such person
• Persons who issue invoices under Rule 57AE requiring registration under Central Excise Rules, 1944
• A person who is liable to pay the service tax and his agent
• Persons registered under the Central Sales Tax Act or the general sales tax law of the relevant state or union territory
• Every person who intends to enter into specified financial transactions in which quoting of PAN is mandatory
• A person not covered in any of the above can voluntarily apply for PAN.

What is TAN?

TAN i.e. Tax Deduction and Collection Account Number is a 10 digit alpha numeric number required to be obtained by all persons who are responsible for deducting tax at source or collecting tax at source. It is compulsory to quote TAN in TDS/TCS return (including any e-TDS/TCS return), any TDS/TCS payment challan, TDS/TCS certificates, Annual Information Return and other documents as may be prescribed.

Who must apply for TAN?

Every person liable to deduct tax at source or collect tax at source is required to obtain TAN. However, a person required to deduct tax under section 194IA (*) can use PAN in place of TAN as such person is not required to obtain TAN.