The procedure and some deductions available while arriving at taxable income
The time to file income tax returns is coming nearer. July 31 is the last date to file IT returns for individuals. The return has to be filed for the previous year - 1.4.2007 to 31.3.2008. So the transactions should have taken place during that period only. Any subsequent transactions will be taken into account during the next year - 2008-09. It is time to compute your taxes and pay off any outstanding dues. This can be done before the date of filing of the returns. It is of utmost importance that one uses the correct form, as is applicable to him. In a radical change from the past, no document (including TDS certificate) should be attached to this form. Officials receiving the returns have been instructed to detach all documents enclosed with this form and return them to the assessee.
The forms can be submitted to the Income Tax Department through any of these methods:
• By furnishing the returns in a paper form
• By furnishing the returns electronically with a digital signature
• By transmitting the data in the returns electronically and thereafter submitting the verification of the returns on Form ITR-V. The assessee needs to print out two copies of Form ITR-V. Both copies should be verified by the assessee and submitted to the Income Tax Department. The receiving official will return one copy after affixing a stamp and seal
• By furnishing a bar-coded paper returns. The acknowledgement slip attached with this form should be filled out. The forms are not to be filled in duplicate. In order to avoid interest and penalty, assessees also need to compute interest liability for either non-payment of advance tax or late payment of instalments of advance tax. The interest rate is calculated at one percent per month on the specified tax amount. This interest can be paid along with the self assessment tax by the assessee.
Obligation to file return - Who should file returns:
Every individual and Hindu Undivided Family (HUF) has to furnish a returns of income if the total income, before allowing deductions under Chapter VI-A, exceeds the maximum amount which is not chargeable to income tax. The losses, if any, will not be allowed to be carried forward unless the returns has been filed on or before the due date.
It is to be noted that the total of the deductions allowable is limited to the amount of gross total income. Deductions are available under Chapter VI-A.
Deductions
These are the deductions available to an individual and HUF, not carrying out any business or profession:
Section 80C:
Some of the major items for deduction under this section are amount paid or deposited towards life insurance, contribution to Provident Fund set up by the Government, recognised Provident Fund, contribution to an approved superannuation fund, and subscription to National Savings Certificate.
Also, certificates, tuition fees, payment/repayment for purchase or construction of a house and other investments are available for deduction. As provided in Section 80CCE, the aggregate amount of deduction under Section 80C, 80CCC and 80CCD will not exceed Rs 1 lakh.
Section 80CCC: Deduction of contributions to certain pension funds.
Section 80CCD: Deduction of contributions to pension scheme of Central Government.
Section 80D: Deduction of medical insurance premium.
Section 80DD: Deduction of maintenance including medical treatment of dependent.
Section 80DDB: Deduction of medical treatment etc.
Section 80E: Deduction of interest on loan taken for higher education.
Section 80G: Deduction of donations to certain funds, charitable institutions etc. Section 80GG: Deduction of rent paid.
Section 80GGC: Deduction of contributions given by any person to political parties.
The time to file income tax returns is coming nearer. July 31 is the last date to file IT returns for individuals. The return has to be filed for the previous year - 1.4.2007 to 31.3.2008. So the transactions should have taken place during that period only. Any subsequent transactions will be taken into account during the next year - 2008-09. It is time to compute your taxes and pay off any outstanding dues. This can be done before the date of filing of the returns. It is of utmost importance that one uses the correct form, as is applicable to him. In a radical change from the past, no document (including TDS certificate) should be attached to this form. Officials receiving the returns have been instructed to detach all documents enclosed with this form and return them to the assessee.
The forms can be submitted to the Income Tax Department through any of these methods:
• By furnishing the returns in a paper form
• By furnishing the returns electronically with a digital signature
• By transmitting the data in the returns electronically and thereafter submitting the verification of the returns on Form ITR-V. The assessee needs to print out two copies of Form ITR-V. Both copies should be verified by the assessee and submitted to the Income Tax Department. The receiving official will return one copy after affixing a stamp and seal
• By furnishing a bar-coded paper returns. The acknowledgement slip attached with this form should be filled out. The forms are not to be filled in duplicate. In order to avoid interest and penalty, assessees also need to compute interest liability for either non-payment of advance tax or late payment of instalments of advance tax. The interest rate is calculated at one percent per month on the specified tax amount. This interest can be paid along with the self assessment tax by the assessee.
Obligation to file return - Who should file returns:
Every individual and Hindu Undivided Family (HUF) has to furnish a returns of income if the total income, before allowing deductions under Chapter VI-A, exceeds the maximum amount which is not chargeable to income tax. The losses, if any, will not be allowed to be carried forward unless the returns has been filed on or before the due date.
It is to be noted that the total of the deductions allowable is limited to the amount of gross total income. Deductions are available under Chapter VI-A.
Deductions
These are the deductions available to an individual and HUF, not carrying out any business or profession:
Section 80C:
Some of the major items for deduction under this section are amount paid or deposited towards life insurance, contribution to Provident Fund set up by the Government, recognised Provident Fund, contribution to an approved superannuation fund, and subscription to National Savings Certificate.
Also, certificates, tuition fees, payment/repayment for purchase or construction of a house and other investments are available for deduction. As provided in Section 80CCE, the aggregate amount of deduction under Section 80C, 80CCC and 80CCD will not exceed Rs 1 lakh.
Section 80CCC: Deduction of contributions to certain pension funds.
Section 80CCD: Deduction of contributions to pension scheme of Central Government.
Section 80D: Deduction of medical insurance premium.
Section 80DD: Deduction of maintenance including medical treatment of dependent.
Section 80DDB: Deduction of medical treatment etc.
Section 80E: Deduction of interest on loan taken for higher education.
Section 80G: Deduction of donations to certain funds, charitable institutions etc. Section 80GG: Deduction of rent paid.
Section 80GGC: Deduction of contributions given by any person to political parties.
