FAQ's

Ans. 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.

Ans. No.
Receipts can be classified into two kinds. A) Revenue receipt B) Capital receipt. The general rule under the Income tax Act is that, all revenue receipt are taxable unless a receipt is specifically exempted and all capital receipts are exempt from taxation unless there is a provision to tax it. Gifts and loans etc are in the nature of capital receipts not attracting tax.

Ans. Gift exceeding Rs 50,000 is taxable unless it is received from

• any person who is a relative or
• on occasion of marriage or
• under will or by inheritance or

in contemplation of death of the payer

Ans. No. The dividend declared by Indian companies is not taxable in the hands of the share holders because tax on distributed profits have already been borne by the company.

Ans. Yes.

Ans. No.

Ans. What is done after the income is earned does not determine its taxation. However charitable contribution to approved institutions will give you the benefit of certain deductions from taxable income.

Ans. At the moment individual, HUF, AOP, and BOI having income below rupees one lakh need not pay any income tax. For other categories [persons] such as co-operatives societies, firms, companies and local authorities no such exempted limits exists, so they have to pay taxes on their entire income. In cases of senior citizens aged above 65 years and women the exempted limit for the financial year 2007-08 are rupees one lakh ninety thousand and one lakh forty thousand respectively.

Ans. Your agricultural income is not taxable per se. However, if you have any other source of income like income from investments, property etc, while calculating tax on them, your agricultural income will be taken into account, so that you pay tax at a higher rate on that other income.

Ans. For every source of income you have to maintain proof of earning and the records specified under the IT Act. In case, no such records have been laid down, you should maintain reasonable level of records with which you can support the claim of income

Ans. Yes.

Ans. It is paid in installments. The amount payable is to be calculated in the following manner :

The deposit of advance tax is made through challan by ticking the relevant column.

Ans. The tax can be reduced by making investment in approved schemes and also by making donations to approved charitable institutions.

Ans. Companies and firms are compulsorily required to file their return electronically, while for others it is still optional. For electronic filing of return you have to log on to the Departmental website http://www.incometaxindia.gov.in/ and upload the information of income and taxes in the prescribed form. If you have digital signature the same can be appended and there would be no need to file a paper return. In case you do not have a digital signature you will be required to file a paper return quoting the provisional acknowledgement number received on completion of uploading.

Ans. Yes.Since legal proceedings under the income tax act can be initiated up to six years prior to the current financial year, you must maintain such documents at least for this period.

Ans. A PAN number has been made compulsory for every transaction with the Income Tax department. It is also mandatory for numerous other financial transactions such as opening of bank accounts, availing institutional financial credits, purchase of high-end consumer item, foreign travel, transaction of immovable properties, dealing in securities etc. A PAN card is a valuable means of photo identification accepted by all government and non-government institutions in the country.

Ans. No. Return is to be filed only if you have taxable income

Ans. Yes.

Ans. Any business or profession that has an annual turnover/gross receipts exceeding rupees ten lakh and net profit of rupees one lakh twenty thousand, must maintain such books of account and documents from which its income can be reasonably ascertained by the department.

Ans. All transfer of capital assets attracts capital gains. Capital assets are those properties that have an enduring value and they are not consumable.

Ans. TDS means Tax Deducted at Source. It is the amount withheld from payments of various kinds such as salary, contract payment, commission etc. This withheld amount can be adjusted against your tax due.