Tax Returns - A Guide

Come the month of June or July and it is time to file the income tax returns.
By this time, individuals will have received Form No.16 (Salary income)
Form No.16A (tax deducted on Other Income).

Obligations of filing tax returns :
It is a legal obligation for every individual to file a return of income, whose taxable income during the year has exceeded the exemption limit of Rs 100,000 (Rs 135,000 in case of females and Rs 185,000 in case of senior citizens). Not Applicale to NRIs.

Documents to keep ready:

• Form No. 16 (received from the employer): This will help to know your income from salary and tax deducted by your employer from your salary income.
• Form No. 16A (received from all the payers who have deducted tax): You will first have to get this form collected from the parties who have deducted tax while making payment to you during the year. This includes banks and companies (with whom you have kept fixed deposits), parties to whom you have given loan, tenant to whom you have rented your property, et cetera.
• Summary of all bank accounts operated during the year: This summary will give an idea about all the income earned during the year and investments and expenditure incurred. This assures that no part of income is left out and you do not miss out any eligible deductions.
• Details of property owned during the year: If you have bought some property during the year, you will need details of rent received and receipts of municipal tax paid during the year. In addition to this, if you have taken this property through a loan, do carry the loan details and a copy of certificate of interest paid during the year.
• Sale & purchase bill / documents / contract note in respect of investments / assets sold during the year: You will also need purchase documents corresponding to the sales made during the year. In case of a large number of transactions, it is advisable that you prepare a statement of sale and corresponding purchase of these investments and arrive at the amount of profit or loss, before actually calculating your taxable income.
• Details of tax payments made during the year: This is required only if you have made advance tax payment during the year.

Form No ITR No 1 for salaried income.

Last date for filing tax returns:The last date for filing return of income for the year ended March 31, 2007 is July 31, 2007 and for individuals who are required to get their books of accounts audited under the Income Tax Act, it is October 31, 2007.If individuals file their returns after the last date mentioned above, they will be charged a penal interest at the rate of 1% per month of delay.