IT_awareness-Final Ver 2003

8/2/2019 IT_awareness-Final Ver 2003

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Income Tax AwarenessIncome Tax Awareness

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DISCLAIMER

This presentation is for general awareness and is notThis presentation is for general awareness and is not

intended to be an opinion of the presenter. Pleaseintended to be an opinion of the presenter. Please

consult your tax consultant for compliance.consult your tax consultant for compliance.


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Why Filing of Returns?


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It helps you establish your credentials inIt helps you establish your credentials in

market (visa, loans, etc)market (visa, loans, etc)


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1.1. INCOME FROM SALARYINCOME FROM SALARY

2.2. INCOME FROM BUSINESS/ PROFESSIONINCOME FROM BUSINESS/ PROFESSION

3.3. INCOME FROM HOUSE PROPERTYINCOME FROM HOUSE PROPERTY

4.4. INCOME FROM OTHER SOURCESINCOME FROM OTHER SOURCES

5.5. CAPITAL GAINSCAPITAL GAINS


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All income received as salary under Employer-EmployeeAll income received as salary under Employer-Employee

relationship is taxed under this head.relationship is taxed under this head.

If income exceeds minimum exemption limit,If income exceeds minimum exemption limit,

1.1. Employers must withhold tax compulsorily, as Tax Deducted atEmployers must withhold tax compulsorily, as Tax Deducted at

Source (TDS), andSource (TDS), and

2.2. Provide their employees with a Form 16 which shows the taxableProvide their employees with a Form 16 which shows the taxable

salary income and tax deducted thereon.salary income and tax deducted thereon.

Even if Tax gets deducted at source, you are liable to file yourEven if Tax gets deducted at source, you are liable to file your

return of income if it exceeds the minimum exemption limitreturn of income if it exceeds the minimum exemption limit


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The computation of income under the head "Profits and Gains ofThe computation of income under the head "Profits and Gains of

Business or Profession" depends on the facts of each assessee.Business or Profession" depends on the facts of each assessee.

If regular books of accounts have been maintainedIf regular books of accounts have been maintained

and Profit and Loss Account has been prepared,and Profit and Loss Account has been prepared,

then the taxes will be payable as per books of accountsthen the taxes will be payable as per books of accounts

If no books of accounts have been maintainedIf no books of accounts have been maintained

and no Profit and Loss Account has been prepared,and no Profit and Loss Account has been prepared,

and Annual Turn over is less than 40 lacsand Annual Turn over is less than 40 lacs

then .then .


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Income from House property is computed by taking what is called AnnualIncome from House property is computed by taking what is called Annual

Value. The annual value in the case of a let out property is the maximumValue. The annual value in the case of a let out property is the maximum

of the following:of the following:

HRA Rent receivedHRA Rent received

Municipal ValuationMunicipal Valuation

Fair Rent (as determined by the I-T department)Fair Rent (as determined by the I-T department)

If a house is not let out and not self-occupied, annual value is assumedIf a house is not let out and not self-occupied, annual value is assumed

to have accrued to the owner. Annual value in case of a self occupiedto have accrued to the owner. Annual value in case of a self occupied

house (only one house at the option of the assessee) is to be taken ashouse (only one house at the option of the assessee) is to be taken as

NIL. (However if there is more than one self occupied house then theNIL. (However if there is more than one self occupied house then the

annual value of the other house/s is taxable.) From this, deduct Municipalannual value of the other house/s is taxable.) From this, deduct MunicipalTax paid and you get the Net Annual Value. From this Net Annual Value,Tax paid and you get the Net Annual Value. From this Net Annual Value,

deduct :deduct :

30% of Net value as repair cost (This is a mandatory deduction)30% of Net value as repair cost (This is a mandatory deduction)

Interest paid or payable on a housing loan against this houseInterest paid or payable on a housing loan against this house

The balance is added to taxable income.The balance is added to taxable income.


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1.1.Transfer of capital assets results in capital gains. ATransfer of capital assets results in capital gains. A

Capital asset is defined as property of any kind held byCapital asset is defined as property of any kind held by

an assessee such as real estate, equity shares, bonds,an assessee such as real estate, equity shares, bonds,

jewellery, paintings, art etc.jewellery, paintings, art etc.

2.2. However, it does not include some items like any stock-However, it does not include some items like any stock-

in-trade for businesses and personal items which mayin-trade for businesses and personal items which may

include jewellery or paintings.include jewellery or paintings.


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1.1.This is a residual head, under this head incomeThis is a residual head, under this head income

which does not meet criteria to go to other headswhich does not meet criteria to go to other heads

is taxed e.g. Interest on Bank Deposits, Otheris taxed e.g. Interest on Bank Deposits, Other

Interest, income from Horse Racing, Gifts etc.Interest, income from Horse Racing, Gifts etc.


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The Indian Income tax act specifically exempts certainThe Indian Income tax act specifically exempts certain

income from tax:income from tax:

1.1. Money received from an Insurance company asMoney received from an Insurance company as

proceeds of an insurance policy (by way of an insuranceproceeds of an insurance policy (by way of an insurance

claim, or by maturity) is generally exempt.claim, or by maturity) is generally exempt.

2.2. Maturity proceeds of a Public Provident Fund (PPF)Maturity proceeds of a Public Provident Fund (PPF)

account.account.

3.3. DividendsDividends


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1.1. Interest and PenaltyInterest and Penalty

2.2. Leads to AnxietyLeads to Anxiety

3.3. Loss of ReputationLoss of Reputation

4.4. Huge cost of litigationHuge cost of litigation

5.5. Opportunity CostOpportunity Cost

6.6. ProsecutionProsecution


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Government is making it increasingly difficultGovernment is making it increasingly difficultto evade taxesto evade taxes

File returns, even if you have nil tax liabilityFile returns, even if you have nil tax liability

One day tax authorities will find out your realOne day tax authorities will find out your realincome and penalize youincome and penalize you


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INCOME TAX GETS YOUR INFORMATION IFINCOME TAX GETS YOUR INFORMATION IF

YOU DEPOSIT CASH IN YOUR BANK ACCTYOU DEPOSIT CASH IN YOUR BANK ACCT

YOU BUY/SELL PROPERTY/CARYOU BUY/SELL PROPERTY/CAR

YOU INVEST IN MUTUAL FUNDSYOU INVEST IN MUTUAL FUNDS

ANY TAX HAS BEEN DEDUCTED AT SOURCE FOR YOURANY TAX HAS BEEN DEDUCTED AT SOURCE FOR YOUR

RECEIPTSRECEIPTS

TRAVEL ABROADTRAVEL ABROAD


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1.1. On 31st July 2010, returns for A.Y. 2010-On 31st July 2010, returns for A.Y. 2010-

11 are due11 are due

2.2. A.Y. 2010-11 means F.Y. 2009-2010A.Y. 2010-11 means F.Y. 2009-2010

3.3. Permissible to file returns for past 2 yrsPermissible to file returns for past 2 yrs


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1.1. 3030thth SEPTEMBER- BUSINESS/ PROFESSIONALSSEPTEMBER- BUSINESS/ PROFESSIONALS

WITH ANNUAL TURN OVER GREATER THAN 40WITH ANNUAL TURN OVER GREATER THAN 40

LACSLACS

2.2. 31ST JULY - ALL OTHERS31ST JULY - ALL OTHERS


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1.1. Consequences of filling returns after due dateConsequences of filling returns after due date

2.2. INTEREST @ 1% per monthINTEREST @ 1% per month

3.3. PENALTY OF Rs 5000PENALTY OF Rs 5000

4.4.THE RISK OF RECEIVINGTHE RISK OF RECEIVING

5.5. 148 INCOME ESCAPING NOTICE148 INCOME ESCAPING NOTICE

6.6. 143-2 SCRUTINY NOTICE143-2 SCRUTINY NOTICE


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AN is one of the basic requirements to file returnsAN is one of the basic requirements to file returns

AN is mandatoryAN is mandatory

o Open Bank Accounto Open Bank Account

urchase or Sell Propertyurchase or Sell Property

urchase or sell Motor Vehicles (except two wheelers)urchase or sell Motor Vehicles (except two wheelers)

ixed Deposits / Mutual Funds above Rs.50,000ixed Deposits / Mutual Funds above Rs.50,000

u Insurance olicu Insurance olic


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1.1. ANYONEANYONE

2.2. HOME MAKERHOME MAKER

3.3. CHILDCHILD


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IT_awareness-Final Ver 2003