You will soon get the Form 16 with details of your income and taxes paid from
your employer. Then you have a couple of months to file your tax returns.
However, the Central Board of
Direct Taxes
(CBDT) has issued a notification which has made it mandatory for individuals
earning an annual income in excess of Rs 10 lakh to file their returns online
from the current financial year. Until now, an individual with income above 10
lakh had the choice of filing income-tax returns either online or through an
auditor/chartered accountant.
Individuals earning over Rs 10 lakh salaried income
"It is now mandatory for individuals with total income above Rs
10 lakh to file their personal
tax returns
online through the income-tax website," says Vineet Agarwal, director,
KPMG. This new notification is applicable to individuals
and Hindu Undivided Family (HUF) taxpayers as well.
Online tax filing
definitely comes with certain advantages. You can e-file the returns from home
or office anytime. Moreover, it is easier to track refunds which will be either
transferred electronically to the bank account or will be sent by cheque.
But don't wait till the last week of July to e-file your returns. Send
signed ITR V form to the Centralised Processing Centre, Bangalore, as soon as
possible and resend the same if you do not receive a confirmation for the one
sent earlier. The income-tax department's
e-filing
website becomes almost inaccessible (due to server overload) during the last few
days of July. In such cases you have the option of filing your e-return through
other private tax filing portals.
"Further, resident individuals having
assets abroad (including authority to sign a bank account held abroad) are
compulsorily required to file their returns electronically for AY 2012-13 and
for subsequent assessment years as well," says Vaibhav Sankla, director-business
development and tax training,
H&R Block
India. Individuals earning up to Rs
5 lakh annual income As per the Notification, only individuals
who satisfy the following conditions are eligible for exemption from furnishing
returns for tax year 2011-12:
a) Total income does not exceed Rs
500,000.
b) Total income consists only of income under the following
heads:
-
'Salaries' -
'Income from other sources' by way of
interest, not exceeding Rs 10,000, from a savings bank account
"Apart
from the above conditions, ensure that you report your Permanent Account Number
(PAN), savings bank account interest income to your employer and the employer
should withhold tax on such interest income," says Amarpal Chadha, tax partner
at
Ernst & Young. Also, the
employer should provide the tax withholding certificate (Form 16) to the
employee which mentions the PAN, details of income and taxes withheld.
"Moreover, there should be no further tax payable by employee by way of advance
tax or self-assessment tax, no refund claim for the relevant tax year and the
employee should receive salary from only one employer for the tax year," says
Chadha.
Individuals in Rs 5-10 lakh
bracket There has not been any change in tax filing for
individuals falling in this income category. They have the option of filing
returns either manually or electronically.
Compared to offline filing,
e-filing is the indeed hassle free. Firstly, the Sahaj form has too many
specifications. The logic behind introducing such specifications is to
facilitate easier processing of forms for the I-T department, given the sheer
increase in the volume of tax payers in the country.
Just to quote one
example, the form has some colour specifications which mean the tax payer has to
find a colour printer to take a printout of the form prior to submission. Under
such circumstances, it only benefits the tax payer to opt for e-filing.
"However, beware of emails that feature a link to the income-tax office website.
These should be carefully evaluated as it may be intended to steal your
sensitive personal information like credit card/bank details," cautions Vineet
Agarwal of KPMG.
For Self-employed
Professionals The notification with regard to exemption from
furnishing returns for tax year 2011-12 is applicable to those individuals where
total income consists only of incomes under the following heads: 'Salaries'.
Also, it mentioned 'Income from other sources' by way of interest, not exceeding
Rs 10,000, from a savings bank account. This automatically rules out
self-employed professionals. "However, the notification with regard to mandatory
e-filing is applicable to an individual or HUF having total income exceeding Rs
10 lakh. Hence, self-employed individuals will also be covered under this
notification," says Vaibhav Sankla.
