Being busy with our economic activities throughout the year to make a living, often tax planning activity is kept to the 11th hour. But in this bargain, one should recognise that a compromise is often made on effective tax planning. You see, rushing to meet you tax expert or chartered account at the 11th hour to seek advice limits the scope of effective tax planning and builds tension for you. And assuming that you have been successful in juggling with time to do so; your responsibility doesn't end there. It is imperative to collate all the data on various incomes, expenditures and investments you have made and file your Income-Tax (I-T) returns on time. Filing I-T returns apart from be viewed as legal responsibility, should be considered as a moral responsibility. It earns you for you the dignity of consciously contributing to the development of the nation. This apart, your I-T returns validate your credit worthiness before financial institutions and make it possible for you to access many financial benefits such as bank credits etc.

To put things in perspective let's understand the meaning of the term "return of income".

It is a prescribed form through which the particulars of income earned by a person in a financial year and taxes paid on such income is communicated to the I-T department after the end of the financial year. Different forms are prescribed for filing of returns for different "persons" / assessees and nature of income earned. The returns forms can be obtained by one by accessing the Income-tax department's website: - www.incometaxindia.gov.in.

The various forms for various types of "assessees" are:
 

ITR1	For Individuals having Income from Salary/ Pension/ family pension & Interest
ITR2	For Individuals and HUFs not having Income from Business or Profession
ITR3	For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship
ITR4	For individuals & HUFs having income from a proprietary business or profession
ITR5	For firms, AOPs and BOIs
ITR6	For Companies other than companies claiming exemption under section 11
ITR7	For persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D)
ITRV	Where the data of the Return of Income/Fringe Benefits in Form ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6 & ITR-7 is transmitted electronically without digital signature

 

In the aforesaid form the I-T department asks for host of details and it could be possible that format undergoes a change. So it is vital for you to keep your documents related to your earnings and investments and collate them, for the purpose of computation of total income and tax thereon. On the income earned by you, if any tax has been deducted at source; we suggest to download the tax credit statement of form 26AS as it can enable you to know whether all the Tax Deduction at Source (TDS) details have been updated in the form. Ideally all the payments made by you as tax should get reflected in the Form 26AS. If any of your tax payments in the assessment year is not reflecting in this statement, then it means the tax money deducted from you has not been submitted to the tax department till the date of record. The said form is available on I-T department's website and can view by quoting your Permanent Account Number (PAN), once you register yourself on the income tax website. You can even download it in the PDF or Excel format and keep it as a record with you. You see, amounts paid as advance tax and withheld in the form of TDS or collected in the form of Tax Collection at Source (TCS) will take the character of your tax due only on completion of self-assessment of your income. This self-assessment is intimated to the department by way of filing of I-T return. Only then does the government acquire rights over the prepaid taxes as its own revenue. Filing of return is critical for this process and, hence has been made mandatory.
 

Due dates for filing I-T returns

Companies & their Directors	30th September
Other business entities, other than companies, if their accounts are auditable & their working partners	30th September
In all other case	31st July

 

Every type of assessees has different due dates for filing their returns for the relevant financial year as depicted by the table above. It is noteworthy that the tax returns for every financial year, is liable for filing in ensuing months of the relevant assessment year. So to simply put, the date for filing tax return for financial year 2012-13, will be the aforesaid (as applicable for the respective assessee) of the assessment year 2013-14.

While one can file I-T returns after the due date as well i.e. any time before the expiry of two years from the end of the financial year in which the income was earned, terming it as "belated returns" under the Income Tax Act, 1961; you would be charged interest for late payment along with a penalty.

Even if you aren't earning any positive income, but on the contrary have suffered a loss during the financial year, you can file your returns for the same and carry forward to the subsequent year for adjustment against its positive income. But in such a case, it is imperative that one files returns before the due date as applicable. Failure to file return of income may result in loss of availability of carry forward of losses to subsequent years. It is noteworthy that, the Government has made it mandatory for everyone to file returns whether or not they come under the taxable bracket.

Perils of not filing tax returns on time:
 

• Not filing your tax returns on time would be laying yourself open to the penal and prosecution provisions under the Income Tax Act. Non-payment of tax attracts interests, penalty and prosecution; where the prosecution can lead to rigorous imprisonment from 6 months to 7 years and fine.
   
• Not filing tax returns on time could act as impediment if you are looking obtaining a loan from bank or even a credit card, as I-T returns often validate your credit worthiness before financial institutions.
   
• Likewise it could impede your visa application approval, if you have plans to travel abroad.
   
• Similarly registration of immovable property could also be problem
   
• As mentioned earlier, not filing I-T returns on time could put you at a disadvantage in case if you suffered any losses which can be carried forward and set-off in the subsequent years.
   

To conclude:

Filing I-T returns or any other tax returns for that matter, is a constitutional duty and earns for you the dignity of consciously contributing to the development of the nation and improve living conditions of citizens. Even you aren't earning income which comes under tax bracket, it is always advantageous to file the same taking into account the perils mentioned above. Filing tax returns allows you be in solace by honouring the constitutional duty and adds to your morality.

Add Comments

Comments

bookings@captscott.com Jun 22, 2013 It would be almost impossible to do a complicated tax return without software but you have to use your brain to know what to put in each slot. The software then does the math and makes a good looking copy.Your instructor should tell you how you should prepare your final project. The object of your class is to learn about preparing tax returns, not looking for the easy way out.

 1