Skip to main content

Filing I-T returns first time? What you need to know

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

 

 

The financial year is over, and we have to file our IT returns for the year gone by. Let us discuss some preliminary aspects of requirement of filing of income tax returns in this article. My discussion is restricted to the law as applicable to individuals only, and is not intended to cover any other income tax payers.

 

Who is required to file the IT returns?
One of the many questions, which individual taxpayers ask: Do I need to file my tax returns even though my employer has already deducted tax at source?

 

We see that many a salaried employees are under the impression that since their employer has already deducted income tax at source, they have discharged their liability, which is not the case. Payment of taxes and filing of income tax return are two separate obligations. Let us understand what is the legal position with regard to filing of the income tax returns.

 

As per the present provisions of Income Tax laws, an individual whose gross total income exceeds the exemption limit has to file his Income Tax return though s/he might have paid all the taxes or taxes have already been deducted from her/his income. Gross total income under the income tax laws means the total income before giving effect to deductions under chapter VI A which, for individuals generally covers deductions under various Sections like 80 C, 80 CCC, 80 CCD, 80CCG, 80D 80G and 80 GGA etc. These deductions among other things include payments of Provident Fund, Life insurance premium, Tuition fee for education for child, NSC, contribution to NPS, PPF, home loan repayment, Health insurance premium, rent paid and deductions for investments made under Rajiv Gandhi Saving Scheme etc.

 

So even in the cases where taxable income is below the exemption limit after the above deductions, you will still have to file your income tax return even when you may not have any tax liability.

 

This exemption limit presently is Rs. 2 lakhs for an ordinary individual taxpayer. For a senior citizen, this limit is Rs. 2.5 lakhs and for the senior citizens above 80 years, the basic exemption limit is Rs. 5 lacs.

 

Let us understand this with the help of an example: Suppose your taxable salary as per Form no. 16 issued by your employer is Rs. 2.80 lakhs and you have other income of Rs.10, 000 thus making your gross total income Rs. 2.90 lakhs.

 

Since you have invested an amount of Rs. 1 lakh in items eligible for deduction under Section 80 C, your taxable income comes down to Rs. 1.9 lakhs, and therefore your employer would not have deducted any tax.

 

You may be under the impression that as your net income is below the exemption limit and since no income tax has been deducted from your salary, you need not file your income tax return. This is not the correct position of law and the right impression to have, but generally people are under this impression.

 

However the legal provision is different.

 

You have to calculate your income before deduction for various deductions like life insurance premium, mediclaim insurance, housing loan repayment and school fee for your child etc.

 

In case your aggregate income before deduction for these expenses exceeds the basic exemption limit as mentioned above, you are required to file your return of income. As pointed out in the above example, you may neither have any tax liability to discharge nor any Tax Deducted at Source (TDS) to claim refund, yet you are still required to file your income tax return. However, there is one exception to the above provision. You will not have to file your income tax return if your are a salaried person, you have disclosed your all other income to your employer and your employer has deducted appropriate tax on aggregate of the salary and other income reported by you and your total income does not exceed Rs. 5 lakhs. This was applicable for the assessment year 2012-2013. For the current assessment year, the notification is yet to be issued by the Government, however you can safely assume that if you satisfy the above conditions, you will be exempt from the requirement of having to file your income tax return.

 

By when should I file my return?
In case you are required to file your income tax return as discussed above, the due date for the year just concluded is July 31, 2013.

 

What if I miss the above date of July 31, 2013?
In case you fail to file your return by the due date as prescribed by law, you can still file your return of income by March 31, 2014 for the year ended March 31, 2013 but you will not be able to revise your return of income in case you notice any mistakes or errors in the return of income filed beyond the due date of 31st July 2013. Moreover in case any amount is still payable as tax on your total income, you will have to pay penal interest on the amount of tax. till you actually file the return.

 

Moreover in case you have incurred any loss in respect of business, or any speculative business or capital gains and want the same to be carried forward for set off in subsequent year, you will have to file the return by July 31, 2013 or your claim for carry forward and set off of such loss shall be lost for ever.

 

Therefore it is advisable to file your returns by the due date.

 

Is there any penalty if I fail to file till last date?
There is no penalty if you file the return of income for the year ended March 31, 2013 by March 31, 2014. However if your income is taxable and you fail to file your IT returns by March 31, 2014, the income tax officer can levy a penalty of Rs. 5,000 after giving you a notice to explain the reasons.

 

So from the above discussion it is clear that though you may not have taxable income but you still may have to file the income tax return. Moreover in case you have taxable income it is advisable to file the return by the due date so that you can revise the return in case any mistake is noticed afterwards.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

ICICI Prudential Dynamic Plan Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   ICICI Prudential Dynamic Plan             Invest Online This fund does remarkably well during falling markets, but fails to show the same prowess during a rising market. The fund sticks to its mandate to adapt to the dynamic nature of the market by shuttling between debt and equity. It takes aggressive asset calls in equity when the market surges by investing in quality mid-cap stocks. At the same time, it adopts a defensive strategy by investing in debt and cash when markets get overvalued, making it a good long-term choice.     For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call     Leave a missed Call on 94 8300 8300   Leave your comment with mail ID and we will ...

What are the factors affect the changes in Interest Rate of Fixed Deposits?

  What are the factors affect the changes in rate of Fixed Deposits? Fixed Deposits are now considered to be a very old fashioned method of saving, but still attract many investors since they have guaranteed returns at the end of the tenure of the investment at a decent interest rate. There are various factors that affect the rates of interest for a Fixed Deposit. Policies of the Reserve Bank of India   - The several norms and restrictions posed by the Reserve Bank of India , in order to gain optimum control over credit and inflow and outflow of fund throughout the country. The repo rate changes, cash reserve ration tends to change and these changes affect the banking products like Fixed Deposits, loans etc. Recession   - When unemployment in a country crosses the benchmark set Recession hits, and slowly the country faces an economic slow movement, affecting the purchasing power of the people in the country, forcing the Reserve Bank of India to release more funds in the financial marke...

Understanding Your Cibil Credit Information Report

   WE ARE all familiar with the anxiety and uncertainty that we feel when applying for a loan. After all, it's the lender who decides whether we can own our dream home, our first car, or whether our children can pursue higher education. In a nutshell, a better life depends on the lender's decisions.    While other factors do play a part in the lender's decision, the Cibil Credit Information Report ( CIR ) plays a crucial role in a lender's decision to approve a loan application.    Previously, lenders would treat all loan seekers equally. Each applicant, if approved by the lender's internal credit policy, would be charged at the same interest rate for a particular loan size and purpose. The lenders would charge a higher interest rate to all the borrowers, in order to compensate for the possible default of a small portion of the loan disbursed. In other words, it's like a professor (the lender) punishing an entire class (borrowers) for the mischief played b...

Mutual Fund Review: ING Dividend Yield

  ING Dividend Yield's small assets enable the fund manager to churn in impressive returns… Strategy The aim of the fund is to invest in stocks which offer a high dividend yield. This fund deploys a value based strategy which aims to gain from investing in fundamentally strong and free cash flow generating businesses. The scheme focuses not only on growth but also on the cash generated by the business, which mostly leads to stable returns even in volatile markets. This fund has a low volatility because of its investment in high yielding stocks. The scheme tries to include stocks that yield dividend above the dividend yield of the Nifty and stocks with liquidity, which throws up a universe of 150 stocks.   Our View Launched in October 2005, this fund invests at least 65 per cent of its assets in high dividend yield stocks. The fund has consistently maintained a mix of stocks across varying market capitalisation, with a higher tilt to mid caps compared to small caps. Howev...

Capital Protection Oriented Funds

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Capital Protection Oriented Funds   Erosion of capital is one of the key concerns for investors wanting to invest in equity mutual funds. To address this concern, asset management companies have launched Capital Protection Oriented Funds (CPOFs). What are CPOFs? CPOFs are generally three to five-year, closed-ended funds where 70-80% of the portfolio is invested in fixed income securities, which mature on or before the scheme's tenure. The investment in fixed income securities grows to 100% at the end of the tenure, providing the investor with capital protection. The remaining portion (20-30%) is used to take exposure to equity, which provides the upside. Exposure to equities is either by directly buying equity stocks (plain vanilla CPOFs) or by b...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now