It is that time of the year when you remember your chartered accountant. Even though tax has been deduced and there is no other source of income or liability, employees have to file income tax returns, especially if the total income before allowing any deduction exceeds the exemption limit.
Here are a few things you should know about income tax…
- As per Income Tax Act, income is taxable under five heads – salary, property, business or profession, capital gain and other sources.
- Salaried persons must obtain Form 16 from their employers every year.
- Income apart from salary is also to be considered.
- Transport allowance is exempt up to Rs.1,600 per month.
- 30% standard deduction is available on income from house property.
- Rent received from the second property is considered as ‘deemed to be let out’.
- For self-occupied house property, deduction of interest on housing loan is allowed up to Rs. 2 lakh and for other house property, actual expenditure of interest on housing loan is allowed.
- Repayment of principal amount of housing loan is deductible u/s 80C up to Rs.1.5 lakh.
- Avoid paying cash to a person in a single day exceeding Rs. 20,000.
- Loans, deposits and immovable property transactions should not be carried out above Rs. 20,000 in cash.
- Business loss can be carried forward to next 8 years.
- Tax audit applicable assesses should deduct TDS on particular transactions.
- Gifts received from strangers of an amount exceeding Rs. 50,000 is taxable.
- Income tax is not chargeable on gifts received at the time of marriage, will and in case of succession and from specified relatives.
- Maximum deduction limit u/s 80C, 80CCC and 80 CCD is Rs. 1.5 lakhs.
- Deduction of medical insurance premium is available up to Rs. 25,000 and for parents is available up to Rs. 20,000.
- Deduction limit of interest earned on saving account is up to Rs. 10, 000.
- Income earned by a minor child is clubbed in the hands of parents.
- Basic exemption limit for individuals for FY2015-16 is Rs. 2.5 lakhs and for senior citizens is Rs. 3 lakhs (above age 60) and Rs. 5 lakhs (above age 80).
- 12% of surcharge is applicable if income exceeds Rs. 1 crore.
- Details of all bank accounts have to be given.
- PAN, passport and Aadhar no. is required.
- Details of fixed assets held in foreign country is a must.
- If taxable income of individual is less than Rs. 5 lakhs, then relief of Rs. 2,000 is available.
- E-filling of return is compulsory if income exceeds Rs. 5 lakhs.
- E-filling of return can be done for previous 2 years only.
- Detailed information of Income Tax is available onincometaxindia.gov.in
- TDS should be made on the date of credit or payment basis of whichever is earlier.
- TDS payment should be made on or before 7th of next month.
- TDS returns are to be filed quarterly. TDS returns can be revised any number of times.
- TDS should be deducted and paid if applicable.
- If TDS is not deducted then deduction of 30% of expenditure is not allowed.
- Late filling of TDS return attracts late filing fees of Rs. 200 per day.
- Every taxpayer should verify his Form 26AS.
- Form 26AS provides information regarding TDS, advance tax paid and details of refund.
- Notice may be sent to the taxpayer if the income mentioned in Form 26AS and the income tax returns filed is different.
* Tax audit is compulsory if sales turnover exceeds Rs.1 crore in case of business.
* Tax audit is compulsory if the gross receipt of professionals exceeds Rs.25 lakhs.
* If sales turnover is below Rs. 1 crore, then net profit of 8% or higher is to be taken as business income. Otherwise tax audit is required.
* Assessee other than company and those eligible for tax audit are required to file Income Tax Return before July 31. Extended date is August 31 for F.Y. 2014-15.
Basic exemption for AY2015-16 & AY2014-15 for women:
|Assessment Years||Age Below 60 Years||Age 60 to 80 Years||Age Above 80 Years|
|Exemption Limit (A.Y. 2014-15)||2,00,000||2,50,000||5,00,000|
|Exemption Limit (A.Y. 2015-16)||2,50,000||3,00,000||5,00,000|
Filing tax returns is compulsory and has to be done on time. Still, we tend to procrastinate. As a result, one may forget to disclose some items. To protect yourself from coming under the scanner of the tax man, ensure there are no mistakes while filing tax returns. The due date for tax audit and income tax return is September 30, so hurry up!