The time to file your income tax returns is coming close. Under the Income Tax Act, every individual whose total income before allowing deductions under Chapter VIA of the Income Tax Act exceeds the maximum amount that is not chargeable to income tax is required to furnish his returns of income. For the current assessment year, 2010-11, (applicable to the previous year 2009-10), the income limits are Rs 1.6 lakhs for men, Rs 1.9 lakhs for women and Rs 2.4 lakhs for senior citizens. For individuals, the income tax returns need to be filed by July 31, 2010.
A taxpayer is also required to declare income he has claimed as exempt from tax such as dividends, long-term capital gains on which securities transaction tax has been paid etc in the returns form.
The government has simplified the IT returns forms for taxpayers to help in easy filing of the tax returns. Any individual having an income through salary or pension, income from one house (excluding cases where loss is brought forward from previous years) and income from other sources (excluding winnings from lottery and such one-off income) can file his tax returns in the simplified form - Saral II.
In case income of any other person such as spouse or minor child is to be clubbed with the income of the taxpayer the same returns form can be used, provided the incomes so clubbed are in the mentioned categories. Most individuals with a salary income and one house will primarily be required to file their tax returns in the new Saral-II form (ITR-1). Individuals with a salary income and owning more than one house have to file their returns in Form ITR-2. The ITR-2 is to be used by an individual or Hindu Undivided Family (HUF) with income under the head salaries/pensions, house property, capital gains, and income from other sources. ITR-3 is to be used by an individual or HUF who is a partner in a firm. ITR-4 is to be used by an individual or HUF who is carrying on a proprietary business or profession. ITR-5 is to be used by a firm, association of person, body of individuals, corporation or society and local authority. ITR-6 is to be used by a company. It is to be noted that no documents like tax computations, TDS certificates issued by the employer (Form 16), Other TDS certificates (Form 16A), tax payment challans etc are required to be attached with these returns forms. A taxpayer may file his tax returns in Saral II with the tax authorities in paper form, or electronically with digital signature, transmitting the data in the returns electronically and then submitting the verification returns in Form ITR-5. In addition to the income and taxes, a taxpayer is also required to furnish details of certain financial transactions undertaken by him during the financial year.
These include:
• Cash deposits of Rs 10 lakhs or more in a savings bank account
• Credit card payment of Rs 2 lakhs or more
• Mutual fund units purchased for Rs 2 lakhs or more
• Bonds or debentures of a company or institution purchased for Rs 5 lakhs or more
• Purchase of shares issued by a company for Rs 1 lakh or more
• Property purchased or sold for Rs 30 lakhs or more
• Purchase of bonds issued by the Reserve Bank of India (RBI) for Rs 5 lakhs or more
