Jul. 21 – Following the Indian income tax law, filing tax returns is an annual mandatory procedure for all taxpayers in the country.
This year, authorities have set the deadline for filing to Jul. 31 for the 2009-2010 financial year. Taxpayers tend to commit common mistakes while filing their returns that lead to penalties and delays.
Here are six things to look out for when filing income tax returns:
PAN: Every taxpayer must obtain a permanent account number (PAN) card from tax authorities; taxpayers without a PAN will be fined- Income tax slab: Before filing the income tax return, one must calculate the tax based on the income tax slab. For those earning up to Rs. 190,000 for women and up to Rs. 240,000 for resident individual of 65 years or above there is no income tax rate; for those earning Rs. 300,001- 500,000 there is a 10 percent tax rate; for Rs. 500,001 upwards it is a 30 percent tax rate; for those earning more than Rs. 1,000,000 there is a surcharge of 10 percent of the total tax liability applicable
- Documents: Taxpayers must keep transaction records like proof of tax and statement showing computation of taxable income; this is in case income tax authorities ask to see the documents
- Disclosure of exempted income: Under the Indian income tax law, income from mutual funds, long-term capital gains are exempted from tax; however, the law requires the taxpayer to report this income to tax authorities at the time of filing of income tax return
- Previous income or income arising out of previous jobs: All the tax deduction at source, withholding taxes or TDS, which are deducted by a previous employer from the salary of the employee must be disclosed to the new employer in case the taxpayer has switched to a new job; the entire TDS return certificate obtained from the ex-employee must be produced while filing of the annual income tax return
- The right jurisdiction: After the tax return is completed, the next step is to file it before or on the due date. For individuals with salary and interest income only, the due date of filing the tax return for the financial year 2009-10 is July 31. The return may be filed either electronically or in printed form under the right jurisdiction.
Vikas Srivastava is a legal associate in the Mumbai office of Dezan Shira & Associates. For professional advice on fulfilling your tax obligations in India, please contact india@dezshira.com.
