We have been talking a lot of financial planning and tax planning. We did all that, now it’s time to file your returns. When it comes to filing income tax returns we are a bit skeptical. Why? We are scared to get caught on the wrong foot. But if we know that we have not done anything wrong then filing of income tax returns is easy.
Let’s go through what we would need to file our returns.
Identify your income sources
This is the starting point. Identify the various sources from where you got your income during the last year. As far as salary is concerned you do not have to worry, your employer would give you your form 16, which would give all the details. What about those who are self employed or have additional income by doing part time business? Make a sum of gross income and make a sum of all expenses which went into making the income. Now the difference would be the Net Income. Now go through your passbook and ensure that all deposits are accounted for, if there is income other that business or salary then make a list of the same, e.g. Rent, sale of shares or mutual funds, Interest, Dividends, etc. These would need to go into heads of Income from house property, Capital gains or other income. (Refer to topics under taxation for details.)
This is the starting point. Identify the various sources from where you got your income during the last year. As far as salary is concerned you do not have to worry, your employer would give you your form 16, which would give all the details. What about those who are self employed or have additional income by doing part time business? Make a sum of gross income and make a sum of all expenses which went into making the income. Now the difference would be the Net Income. Now go through your passbook and ensure that all deposits are accounted for, if there is income other that business or salary then make a list of the same, e.g. Rent, sale of shares or mutual funds, Interest, Dividends, etc. These would need to go into heads of Income from house property, Capital gains or other income. (Refer to topics under taxation for details.)
Identify deductions
Sum all deductions available under the different sections of 80. If you have salary income and you have submitted the details to your employer, he would have shown it in form 16. Under each head of income there are deductions available, refer to http://en.wikipedia.org/wiki/Income_tax_in_India for details.
Sum all deductions available under the different sections of 80. If you have salary income and you have submitted the details to your employer, he would have shown it in form 16. Under each head of income there are deductions available, refer to http://en.wikipedia.org/wiki/Income_tax_in_India for details.
Finding out the tax payable
The final taxable income and tax rate differs depending on your category i.e. are you a woman, senior citizen or other individuals
The final taxable income and tax rate differs depending on your category i.e. are you a woman, senior citizen or other individuals
For individual tax payers, no tax for income below Rs 1,60,000
Women tax payers have no tax for income below Rs 1,90,000
Senior citizens do not have to pay tax if their income is below Rs 2,40,000
Women tax payers have no tax for income below Rs 1,90,000
Senior citizens do not have to pay tax if their income is below Rs 2,40,000
The income tax slabs for assessment year 2009-10 as per the Finance Ministry website:
| Income tax slab (in Rs.) | Tax |
| Income tax slabs for Individuals | |
| 0 to 1,60,000 | No Tax |
| 1,60,001 to 3,00,000 | 10% |
| 3,00,001 to 5,00,000 | 20% |
| Above 5,00,000 | 30% |
| Income tax slabs for Women | |
| 0 to 1,90,000 | No Tax |
| 1,90,001 to 3,00,000 | 10% |
| 3,00,001 to 5,00,000 | 20% |
| Above 5,00,000 | 30% |
| Income tax slabs for Senior Citizens | |
| 0 to 2,40,000 | No Tax |
| 2,40,001 to 3,00,000 | 10% |
| 3,00,001 to 5,00,000 | 20% |
| Above 5,00,000 | 30% |
Calculating tax payable
Reduce the total deductions from the gross total income under each head of income to arrive at the actual amount on which the tax is to be paid. Calculate the tax payable based on the slab rates in which you fall. If you have any tax deducted at source (TDS) this should be deducted from your total tax liability.
Reduce the total deductions from the gross total income under each head of income to arrive at the actual amount on which the tax is to be paid. Calculate the tax payable based on the slab rates in which you fall. If you have any tax deducted at source (TDS) this should be deducted from your total tax liability.
Filling the correct ITR form
This depends on your source of income. ITR-1 is the form to be filled in by individuals having income from salary or pension and income in the form of interest.
This depends on your source of income. ITR-1 is the form to be filled in by individuals having income from salary or pension and income in the form of interest.
ITR-2 is the form should be filled in by persons who in addition to the above list of income from capital gains, house property and income from other sources.
All self-employed individuals making income from business or profession should fill in the ITR-4 form.
Filing tax return
This can be done offline and online. The income tax department has good excel worksheets which help in creating XML files which can be used for doing online filing(http://www.incometaxindia.gov.in/). Online payment of taxes can be done through e-filing website, and through internet banking.
This can be done offline and online. The income tax department has good excel worksheets which help in creating XML files which can be used for doing online filing(http://www.incometaxindia.gov.in/). Online payment of taxes can be done through e-filing website, and through internet banking.
If you are still not confident contact your chartered accountant.
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