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I-T returns: Refunds may take time

Individuals should file their returns as soon as possible after 1st April. However the income tax department does not publish revised forms and related instructions until well past that date. Therefore although in theory, the individual is entitled to file his returns as early as he chooses, in actual practice he is officially hindered from doing so until much later.

COLLATING DATA

Tax payers are asked to collect their personal financial data before the end of the financial year. Each year, many people do maintain details from 1st April onwards each year through a spreadsheet. But, one has to struggle to finalise this information after 31st March mostly because banks do not provide interest certificates for the previous twelve months sometimes until well into May. This inhibits correct accounting of both, income and TDS deducted, particularly relating to cumulative deposits.

FORM 16A

Both banks and other investment institutions do not provide Forms 16A often until June of the following year, despite being urged to do so much earlier. According to them, income tax authorities have given them liberty to finalise such documentation only by end May, how can one file one's returns well before the final date.

ONLINE DATA

Tax authorities have been touting the introduction of direct access to information provided in the Form 26AS, on its website. But there have been instances when the information displayed therein, regarding interests and tax deducted at source (TDS), from a leading private sector bank, were erroneous. This, even while the data on the physical interest Certificate which the branch gave was correct.

Since the IT Department refuses to accept documentary support to returns, the individual in this case was told, that the assessment would be based only on what appeared on his 26AS display. This reduced the refund due to him. It took the bank over two months to remedy their faults. In the process, the returns could be only in the third week of July.

PAYING CAPITAL GAINS

Individuals are required to pay the due capital gains taxes, within the end of the quarter in which these are generated. Indexation of Long Term Capital Gain (LTCG)is permissible, but the department does not provide the index figure for the current financial year usually until almost its end. Thus, compute of dues is an issue. Ideally, this data should be available before August end each year. Currently, tax payers have to pay an interest on tax shortfalls, if their indexation figures are more favourable than the department's.

MAJOR EXPENSES

The returns filed should report major expenditures. But, any such requirement is known only through the design of the form and the attached instructions which are published well after the end of the financial year. By then, an individual might not have recorded the previous twelve months' data. Unless, any such requirement is made known before the end of April of the financial year for which it will apply, it isf difficult to gather such data. Ideally, failing such an announcement, such requirement should be prohibited from being mandatory until the following financial year.

QUICK REFUNDS

Early submission of returns are supposed to result in quick issue of any due refunds. But, this really hasn't been the case for many tax payers, who are still awaiting refunds.
 

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