The word Income has a very broad and inclusive meaning. In case of a salaried person, all that is received from an employer in cash, kind or as a facility is considered as income. For a businessman, his net profits will constitute income. Income may also flow from investments in the form of Interest, Dividend, and Commission etc. Infect the Income Tax Act does not differentiate between legal and illegal income for purpose of taxation. Under the Act, all incomes earned by persons are classified into 5 different heads, such as:
1) Income from Salary
2) Income from House property
3) Income from Business or Profession
4) Income from capital gains
5) Income from other sources
1) What is an Assessment Year?
It is the twelve-month period 1st April to 31st March immediately following the previous year [refer answer-4]. In the Assessment year a person files his return for the income earned in the previous year. For example for FY:2006-07 the AY is 2007-08.
2) Who is a resident?
If an individual stays in India for 182 days or more in a year, he is treated as resident in that year regardless of his citizenship. If the stay is less than 182 days he is a non-residen
4) How does the Government collect Income Tax?
Taxes are collected by three means: a) voluntary payment by persons into various designated Banks. For example Advance Tax and Self Assessment Tax b) Taxes deducted at source [TDS] on your behalf from the payments receivable by you. c) Taxes collected at source [TCS] on your behalf at the time of spending. It is the constitutional obligation of every person earning income to compute his income and pay taxes correctly.
5) What can I do to reduce my tax?
The tax can be reduced by making investment in approved schemes and also by making donations to approved charitable institutions.
6) Will I be put to any disadvantage by filing my return?
No. On the contrary by not filing your return in spite of having taxable income, you will be laying yourself open to the penal and prosecution provisions under the Income-tax Act.
7) What are the benefits of filing my return of income?
Filing of return is your constitutional duty and earns for you the dignity of consciously contributing to the development of the nation. This apart, your IT returns validate your credit worthiness before financial institutions and make it possible for you to access many financial benefits such as bank credits etc.
8) If I fail to furnish my return within the due date of filing, will I be fined or penalized?
Yes. This may take the form of interest if the return is not filed before the end of the assessment year. If the return is not filed even after the end of the assessment year, penalty may also be levied.
9) Can a return be filed after the due date?
Yes. It may be furnished at any time before the expiry of two years from the end of the financial year in which the income was earned. For example, in case of income earned during FY 2006-07, the belated return can be filed before 31st March 2009.
10) When can I get a Notice from Income Tax Department?
11) What are the different scrutiny assessments which can be levied by the Income Tax Department?
12) What are the due dates for filing of returns for non-corporate and corporate taxpayers?
As per the provisions of section 139 of the Income Tax Act, 1961 the due dates for filing of returns of income for different category of assessees are as under:
1.For all Corporate assessees and all such non corporate assessee, whose accounts are required to be audited, including working partners of such firms, the30th Sept. of the Astt. Year.
2.For such corporate assessee which is required to furnish a report u/s 92E of the I T Act, 1961, the 30th Nov. of the Astt. Year.
3. For any other assessees, the 31st July of the Astt. Year.