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ShareJuly 31, the last date for filing our tax return is round the corner and most of us would be busy with the same. As readers would be aware, since last year, the old tax return form Saral has been scrapped and replaced with the new ITR series. There are eight forms in all, each applicable to a particular category of taxpayer (see table) and are classified as ITR series 1 to 8.
Simultaneously, e-filing of tax returns is now available for all categories for taxpayers though it is mandatory only in the case of corporate taxpayers and firms which are liable to tax audit under Section 44 AB of the Income-Tax Act (ITA). More on this later.
Coming back to the new forms -- vide Circular No 03 / 2009, dated May 21, 2009, the Central Board of Direct Taxes has spelt out clearly that the tax return should not be accompanied by any attachments or annexures.
Thus, taxpayers should not enclose any statement along with the return such as the computation of income or tax, Form 16, copies of balance-sheet, profit and loss account, TDS/ TCS certificates, proof of payment of advance tax or self-assessment tax etc. However, take care to maintain these documents on file as the same will have to be produced before the assessing officer upon demand by him.
Though similar instructions were issued last year, taxpayers found that there were several instances where the tax department staff and officials insisted on annexures attached to the forms, especially Form 16 and TDS certificates. Therefore, this year, in case there is a refusal to accept returns without annexures, taxpayers can point out to the erring official the relevant provision of the above mentioned circular that clearly states that accepting a tax return with annexures is against the expressed policy of the government and is not in consonance with legal provisions.
Those who are computer savvy as also reasonably familiar with the tax provisions may opt for the simplicity of e-filing. This way you can actually file your tax return without having to get up from your chair.
Detailed information is available on www.incometaxindiaefiling.gov.in. The basic process may be summarised as follows:
First select the appropriate return form (see table)
Download a Return Preparation Software available on the site. This is nothing but a simple Microsoft Excel utility
Fill your return offline and generate an XML file
Register and create a user id and password. In all cases, PAN is the user id
Login and click on relevant form on left panel and select "Submit Return"
Select XML file from your computer and click on "Upload" button
Upon successful upload, acknowledgement details would be displayed. Click on "Print" to generate a printout of acknowledgement/ITR-V Form
In case the return is digitally signed, upon generation of the acknowledgement, the return filing process gets completed. You may keep a print of the acknowledgement for your record.
In case the return is not digitally signed, upon successful uploading of e-Return, the ITR-V Form would be generated which needs to be printed by the taxpayer. This is an acknowledgement-cum-verification form. Duly filled, this form should be mailed to "Income Tax Department - CPC, Post Box No - 1, Electronic City Post Office Banaglore - 560100, Karnataka" within 30 days of filing electronically.
Taxpayers may note that the above process is a major departure from last year where ITR-V was to be submitted with the local Income-Tax Office within 15 days of filing electronically.
Several issues arise due to this newly instituted procedure. First and foremost, if Form ITR-V is furnished after the 30 day period, it will be taken as if the return was never filed and the entire process will have to be repeated again. Now take a case where a taxpayer mails the form in time, however, there is a delay at the postal department's end.
For no fault of the assessee, he will be penalised for filing the return late. Secondly, a stamped copy of ITR-V used to serve as proof of having filed a tax return. Copies of tax returns are needed for many purposes from applying for a visa to taking a home loan.
Now, in the absence of a stamped acknowledgement from the tax department, it is not clear how the taxpayer can prove to someone outside the department of actually having duly filed the tax return.
It is because of issues such as the above that electronic filing has really not taken off in the way it was supposed to. This year, there is yet another issue with respect to claiming credit for TDS only by way of the system of the unique transaction number (UTN) that is already generating debate and controversy.
That topic would be discussed next week. In the meanwhile, one finds it ironical that in a country in which less than 3% of the population actually pays its taxes, instead of laying out the red carpet for this small minority, as the years go by, the process becomes more and more complicated.
The writer is director, Wonderland Consultants, a tax and financial planning firm.
