| Question-1 |
Who
is required to file Income Tax Return? |
| Answer :- |
|
The
following persons are under statutory obligation
to file return. |
| Company/Firm |
Any
Income or loss. |
| A person other
than a Company |
Income
(without claiming deduction under sections
10A,
10B,
10BA, 80C to 80U) in excess of the amount
not chargeable
to tax. |
|
|
| Question-2 |
What is one out of six categories
for filing Income Tax Returns? |
| Answer :- |
|
The provisions of one out of six categories
were applicable up to A.Y. 2005-06 |
|
| Question-3 |
What will be the due date for
filing my Income Tax Return? |
| Answer :- |
|
The due dates for filing returns of income
are given below: |
| |
Situation |
Due
Date |
| 1. |
Where the assessee is
a Company. |
October 31 |
| 2. |
Where the assessee is
other than a company: |
|
| |
- |
In case where accounts
are required to be audited under
any law. |
October 31 |
| |
- |
Where the assessee is a working
partner in a firm whose accounts
are required to be audited under
any law. |
October 31 |
| |
- |
In any other case |
July 31 |
|
|
| Question-4 |
What will be the consequences
of not filing the return within due date
? |
| Answer :- |
|
If the person does not file the Return
of income then he may be liable to pay
Interest on unpaid taxes and a penalty
of Rs.5000. (Penalty is levied, if return
is not filed before the end of the relevant
assessment Year). |
|
| Question-5 |
What will be the consequences
of not filing the return at all? |
| Answer :- |
|
If the person liable to file the Income
tax Return does not file the Return then
he may be liable to penalties
and prosecution. |
|
| Question-6 |
What is the Assessment Year? |
| Answer :- |
|
Assessment Year is the period of 12 months
commencing on the 1 st day of April every
year .Assessment Year is practically a financial
year immediately following the previous
year .The income of the previous year is
assessed to tax in an assessment year relevant
to that previous year. |
|
| Question-7 |
What are Income
tax rates for the A.Y. 2007-08?
|
| Answer
:- |
The following are the
income tax rates for A.Y.2007-08:
|
| (a).For
resident Women (Who is below 65
years at any time during the previous
year) |
| NET
INCOME RANGE
|
RATE OF
INCOME – TAX |
SURCHARGE
|
EDUCATION
CESS |
| Upto
Rs. 1,35,000 |
NIL
|
NIL
|
NIL |
| Rs.1,35,000
– Rs. 1,50,000 |
10%
of the amount by which total income
exceeds Rs. 1, 35,000. |
NIL
|
2% of Income Tax
|
| Rs.1,50,000
– Rs.2,50,000 |
Rs.1500
plus 20% of the amount by which
total income exceeds Rs.1, 50,000.
|
NIL
|
2% of Income Tax
|
| Rs.2,50,000
–Rs.10,00,000 |
Rs.21,
500 plus 30% of the amount by
which the total income exceeds
Rs.2, 50,000. |
NIL
|
2% of Income Tax
|
| Above
Rs.10,00,000 |
Rs.2,
46,500 plus 30% of the amount
by which the total income exceeds
Rs.10, 00,000. |
10%
of Income Tax |
2% of Income Tax
& surcharge |
| (b).For resident Senior citizen
(Who is 65 years or more at the
time during the previous years)
|
| NET
INCOME RANGE
|
RATE
OF INCOME – TAX |
SURCHARGE
|
EDUCATION
CESS |
| Upto
Rs. 1,85,000 |
NIL
|
NIL
|
NIL |
| Rs.1,85,000
– Rs. 2,50,000 |
20%
of the amount by which total income
exceeds Rs. 1, 85,000. |
NIL
|
2% of Income Tax
|
| Rs.2,50,000
– Rs.10,00,000 |
Rs.13000
plus 30% of the amount by which
total income exceeds Rs.2, 50,000.
|
NIL
|
2% of Income Tax
|
| Above
Rs.10,00,000 |
Rs.2,
38,000 plus 30% of the amount
by which the total income exceeds
Rs.10, 00,000. |
10%
of Income Tax |
2% of Income Tax
& surcharge |
| (c). For any other individual,
every HUF/AOP/BOI/ artificial person-
(OTHER THAN A COMPANY /firm ) |
| NET
INCOME RANGE
|
RATE
OF INCOME – TAX |
SURCHARGE
|
EDUCATION
CESS |
| Upto
Rs. 1,00,000 |
NIL
|
NIL
|
NIL |
| Rs.1,00,000
– Rs. 1,50,000 |
10%
of the amount by which total income
exceeds Rs. 1, 00,000. |
NIL
|
2% of Income Tax
|
| Rs.1,50,000
– Rs.2,50,000 |
Rs.5000
plus 20% of the amount by which
total income exceeds Rs.1, 50,000.
|
NIL
|
2% of Income Tax
|
| Rs.2,50,000
–Rs.10,00,000 |
Rs.25,
000 plus 30% of the amount by
which the total income exceeds
Rs.2, 50,000. |
NIL
|
2% of Income Tax
|
| Above
Rs.10,00,000 |
Rs.2,
50,000 plus 30% of the amount
by which the total income exceeds
Rs.10, 00,000. |
10%
of Income Tax |
2% of Income Tax
& surcharge |
| Firms
: 30% + 10% Surcharge
+ 2% Education cess of Income Tax
& Surcharge .
|
| |
|
|
|
| Companies:
|
|
|
|
| |
Company |
Rate
of Tax |
|
| |
In the
case of a domestic Company. |
30% |
|
| |
In the
case of a Foreign Company. |
40% |
|
| 10%
Surcharge on Domestic company and
2.5% Surcharge on Non-domestic company
+ 2% Education cess of Income Tax
& Surcharge. |
| Minimum
Alternate Tax (MAT) |
|
|
| (As
a % of books Profit) |
|
|
|
| |
Income
Tax |
Surcharge
|
Education
Cess |
Total
|
| Domestic Company
|
10
|
1
|
0.22
|
11.22
|
| Foreign Company
|
10
|
0.25
|
0.205
|
10.455
|
|
|
| Question-8 |
What is the
amount of Standard Deduction? |
| Answer
:- |
Standard Deduction
for salaried employees-u/s 16
(i) will not be available in the
case of salaried employees with
effect from A.Y. 2006-2007. However
u/s 16(ii) entertainment allowance
deduction is only in case of Govt.
employees and would be the least
of Rs.5,000 or 20% of salary (where
salary excludes any allowance,
benefits or other perquisites)
or amount of entertainment allowance
granted during the previous year
and deduction of professional
tax u/s 16(iii) would be available
only in the year in which it is
paid. There is no monetary ceiling
for deduction u/s 16(iii).
Standard Deduction under House
Property-
30% of Net Annual Value is allowed
as a deduction u/s 24(a) irrespective
of any expenditure incurred by
the taxpayer.
Standard Deduction for family
pension-
In case of family pension least
of Rs.15,000 or 1/3rd of such
income is allowed as a deduction
u/s 57(ii a)
Standard Deduction in case of
clubbing of minor son’s
income u/s 64(1 A)-
In this case an individual is
allowed a deduction of least of
Rs.1,500 or actual income of minor
for each minor child u/s 10(32).
|
|
|
| Question-9 What is the provisions u/s
80C? |
| Answer
:- |
The Provisions of section
80C are given below- |
| |
1. |
Deduction from GTI- under section
80C, deduction would be available
from gross total income. |
| |
2. |
Individual/HUF/-only an individual
or a HUF can claim deduction under
sec. 80C. |
| |
3. |
Qualifying investment – The investment
eligible for deduction under sec.
80C are the same as those entitled
for under section 88 like deferred
annuities, purchase of infrastructure
bonds, payment of tuition fees,
repayment of principal amount of
housing loans, contribution towards
NSC VIII issue etc |
| |
4. |
Amount deductible under sec 80C-
Amount deductible under section
80C is equal to 100 per cent of
the “qualifying investment”, or
1 Lakh, Whichever is lower. |
| |
5. |
The maximum amount deductible
under sections 80C, 80CCC and 80CCD
cannot exceed Rs. 1 Lakh in aggregate. |
|
|
| Question-10
What is PAN and its benefits and
how to apply for it? |
| Answer :- |
PAN (Permanent Account
Number) – It is a unique 10 character
alpha numeric number allotted by
the Income tax department. Every
Person shall quote such number-
|
| |
1. |
In all his returns to,
or correspondence with, any income
tax authority; |
| |
2. |
In all challans for the payment
of any sum due under this act; |
| |
There
are certain transactions for which
it is mandatory to quote the PAN
namely |
| |
1. |
Sale or purchase of any immovable
property valued at Rs5 Lacs or more.
|
| |
2. |
Sale or purchase of a motor vehicle
or vehicle which requires registration.
|
| |
3. |
A time deposit exceeding Rs. 50,000
with a banking company to which
the Banking |
| |
Regulation Act,
1949 applies. |
| |
1. |
A deposit, exceeding Rs. 50,000
in any account with Post office
Saving Bank. |
| |
2. |
A contract of value exceeding
Rs. 10 Lacs for sale or purchase
of securities. |
| |
3. |
Opening of a bank account. |
| |
4. |
Making an application for installation
of a telephone connection. |
| |
5. |
Payments to hotels and restaurants
against their bills for an amount
exceeding Rs. 25,000 at any one
time. |
| |
6. |
Payment in cash for purchase of
bank drafts or pay orders or banker's
Cheque from a bank or an amount
aggregating Rs50000.00 or more during
any one day; |
| |
7. |
Deposit in cash aggregating Rs50000.00
or more during any one day, with
a bank; |
| |
8. |
Payment in cash in connection
with travel to any foreign country
of an amount exceeding Rs25000.00
at any one time; |
| |
9. |
Making any application to any
banking company or to any other
company or institution, for issue
of a credit card; |
| |
10. |
Payment of an amount of Rs50000.00
or more to a Mutual Fund for purchase
of its units; |
| |
11. |
Payment of an amount of Rs50000.00
or more to a company for acquiring
shares issued by it; |
| |
12. |
Payment of an amount of Rs50000.00
or more to a company or an institution
for acquiring debentures or bonds
issued by it; |
| |
13. |
Payment of an amount of Rs50000.00
or more to the Reserve Bank of India,
for acquiring bonds issued by it.
|
| |
|
|
How
to apply: |
Application for Allotment
of Permanent Account Number is to
made in form No. 49A which is available
at www.tin-nsdl.com. |
|
|
| Question-11
What is form No. 15-H? |
| Answer
:- |
Form
No. 15-H is the
declaration in writing to
be made by a person being
senior citizen & 15G
by others not being
a company or a firm if he
desires to receive interest
on securities or interest
other than interest on securities
or income in respect of
units without deduction
of tax at source subject
to the following conditions:
|
|
| |
Tax on total income
of the previous Year is NIL and
|
| |
Amount of interest received
does not exceed the maximum amount
not chargeable to tax. |
| Note:- |
|
|
| |
Separate declaration
is sent to each person responsible
for paying such income and in respect
of each investment. |
| |
Declaration is valid
for one year. |
| |
A copy of form No. 15
H is furnished by the person responsible
for paying such income to the chief
commissioner or commissioner on
or before seventh day of succeeding
month. |
| If the aggregate
of income (in respect of which declaration
is furnished) credited, paid or
to be credited or paid to such person
during the previous year in which
such income is to be included, exceeds
the maximum amount, which is not
chargeable to income tax, then Form
No. 15 H can not be filed. |
|
|
| Question-12
What is the difference between long
term and short-term capital gain? |
| Answer
:- |
Any profit
arising from the sale,
purchase or transfer of
a capital asset is Chargeable
to tax under the head
“Capital Gains”. |
|
| Short-term
Capital Gain: |
It is capital gain
arising on transfer of a short-term
capital asset. Short-term capital
asset means a capital asset held
by an assessee for not more than
36 months immediately prior to its
date of transfer. However in the
following case the holding period
is less than 12 months: |
| |
Equity or preference shares in
a company. |
| |
Securities listed in a recognized
stock exchange in India . |
| |
Units of UTI. |
| |
Units of mutual funds. |
| Long-term Capital Gains:
|
It is capital gain arising on
the transfer of a long-term capital
asset. |
| Long-term capital asset |
means an asset other than a short-term
capital asset. |
|
|
| Question-13.
Who is liable to pay advance tax?
|
| Answer-13. An
assessee is liable to pay advance
tax if the tax payable is Rs. 5000
or more.
|
|
| Question-14.
What are the due
dates for payment of advance tax?
|
| Answer-14. Due
dates for payment of advance tax
is as follows: |
|
|
In the
case of corporate assessee |
In the
case of non – corporate assessee
|
| On or before 15
th June of the previous year.
|
Upto 15% of advance
tax payable |
-------- |
| On or before 15
th Sept. of the previous year.
|
Upto 45% of advance
tax payable |
Upto 30% of advance
tax payable |
| On or before 15
th Dec. of the previous year.
|
Upto 75% of advance
tax payable |
Upto 60% of advance
tax payable |
| On or before 15
th March of the previous year.
|
Upto 100% of advance
tax payable |
Upto 100% of advance
tax payable |
|
|
| Question-15.
What are the consequences
of non-payment of advance-tax? |
Answer-15. If
the assessee defaults in payment
of advance tax then he has to pay
penal interest u/s 234B and 234C. |
|
|
|
| Question-16.
What is the maximum amount of deduction
available for interest on borrowed
capital for self occupied house
property? |
| Answer- |
| |
|
Amount
(Rs.) |
| 1)
If Capital is borrowed on or after
1 st April, 1999 for acquiring
or constructing a property and
a Acquisition or construction
is completed within 3 years from
the end of the financial year
in which capital was borrowed.
|
|
Rs.1,50,000
|
| 2) In any other
case. |
|
Rs.30,000
|
|
| |
|
