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Not only at the time of filing income tax return but also after filing it there are a lot of questions in an individual’s mind. So we decided to answer some of the most common queries.
- Very first question which baffles the mind of every earning person – Do I need to file income tax return?
If your gross total income (i.e. before adjusting any deduction or exemption) is more than Rs. 2.5 lacs for any financial year then it is mandatory to file income tax return in its assessment year. It is applicable to NRI’s also if they earned income in India?There are other important reasons too for which you are required to file income tax return.
- If you want to claim an income tax refund.
- In case you want to carry forward a loss under a head of income.
- Return filing is mandatory if you are a resident individual and have an asset or financial interest in an entity located outside of India (not applicable to NRIs or RNORs).Or if you are a resident and a signing authority in a foreign account (not applicable to NRIs or RNORs).
- Proof of return filing may also be required at the time of applying for a loan or visa etc.
- What are the difference between assessment year (AY) and financial year (FY)?
The financial year is the one in which you have earned the income while the year following it is called the assessment year. For example, if you earned income between 1st April 2014 and 31st March 2015, then the year 2014-15 will be referred as FY and the year 2015-16 will be the AY (in which you are required to file the return).
- When am I liable to pay advance tax?
If your expected tax liability is more than Rs. 10,000 in a financial year and your TDS is not sufficient to meet that liability then you must pay advance tax on balance amount to avoid any penalty. For e.g., if your tax liability is Rs. 25,000 but yours TDS is Rs. 10,000 then you can pay the remaining tax liability, i.e. Rs. 15,000 as advance tax.
- Why should I pay penalty interest of Section 234 A, B and C?
- For Interest U/s 234 AIf a return was filed after a due date, then under Section 234A, you are liable to pay 1% simple interest per month on the balance tax payable which is applicable to the month of filing return.
Note: Section 234A penalty is not applicable if you don’t have any balance tax payable other than self-assessment tax.
- For Interest U/s 234B & CYou are expected to pay advance tax if your tax liability is more than Rs. 10,000 at the specified due dates by 15th September, 15th December and 15th March. If you don’t pay advance tax then, you will have to pay a penalty in the form of interest under section 234C & 234B.
- When will I get my income tax refund?
You will get your income tax refund only after your ITR gets processed by Income tax Department. You can also check its status by using the link provided. https://tin.tin.nsdl.com/oltas/refundstatuslogin.htmlIn some cases, you may not receive any refund even after your ITR is processed due to errors made while filing tax returns. For e.g., if the wrong TAN is entered to claim TDS deduction then you can check it in Intimation U/s 143(1).You can find your intimation in your email account (email registered with income tax department) and use communication reference number provided there for rectification of errors.
- Even if the due date is over, can I still file Income Tax return?
- If due to some unforeseen circumstances, you couldn’t file your income tax return within the due date [i.e. time allowed by section 139(1)], then don’t stress. You can still file your income tax return. However, this extended time comes with conditions and consequences. The extended time allowed to you by the income tax act is one year from the end of the relevant assessment year. So for example, if you missed the due date for filing your tax return for the financial year 2014-15, you can still file a belated return on or before 31st March
- Apart from this, you can also file a return for FY 2014-15 by 31st March 2016 in order to avoid paying the penalty of Rs 5,000 along with interest.