HOME   |    SITE MAP  |   SEARCH
 
 
 FAQ's
Who is required to file Income Tax Return?
What is one out of six categories for filing Income Tax Returns?
What will be the due date for filing my Income Tax Return?
What will be the consequences of not filing the return within due date?
What will be the consequences of not filing the return at all?
What is the Assessment Year?
What are Income tax rates for the A.Y. 2007-08?
What is the amount of Standard Deduction?
What is the provisions u/s 80C?
What is PAN and its benefits and how to apply for it?
What is form No. 15-H?
What is the difference between long term and short-term capital gain?
Who is liable to pay advance tax?
What are the due dates for payment of advance tax?
What are the consequences of non-payment of advance-tax?
What is the maximum amount of deduction available for interest on borrowed capital for self occupied house property?
   
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

 
Copyright © Sahil Singla - All Rights Reserved.