Mukesh Patel.in
practical tax & investment planning online
international tax expert / columnist / author / speaker

I.T. SEEKS BIGGER ROLE FOR I.T.!

If your taxable income exceeds Rs.5 lakhs, E-filing of your Income-tax Return shall be mandatory from A.Y. 2013-14!

         The Income-tax (IT) Department is seeking to place increasingly greater reliance on Information Technology (IT). Under its notification issued on 1st May, 2013, the Central Board of Direct Taxes (CBDT) has made it mandatory for all taxpayers with total income exceeding Rs.5 lakhs to e-file their tax returns from the current Assessment Year (AY) 2013-14.

        Today, nearly 90% of India’s personal Income-tax collection is contributed by this group with incomes above Rs.5 lakh, although they comprise just 10% in number, an estimated 35 lakhs out of the total 3.50 crore taxpayers in India. This also goes a long way in building a strong database of the income and financial information and analysis of taxpayers in the country. Infact, through the FM’s budget speech this year, we got to know for the first time that there are only 42,800 persons in the country who have admitted taxable income over Rs.1 crore. We would not have got this information, without the e-filing database of the I.T. Department.

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YEAR END TAX MANAGEMENT!

With 31st March around, just ensure that you are not missing out on securing any tax saving & filing of your tax return! 

As the fiscal year 2012-13 ends on 31st March, it’s time for all income-tax taxpayers to take a quick look whether they have fully availed of the opportunities for tax saving via saving of specified investments and allocations. 

 TAX SAVING THE 80C WAY!

            ‘Be happy and gay, saving tax the 80C way!’  This should be the ‘magic mantra’ of all taxpayers. “My liquidity constraints do not permit me to invest,” some may retort.  But let this not be your excuse.  Infact, you should be prepared to even beg or borrow or secure a loan or gift or even draw out of your exempt income or accumulation, to make up for your investment limit of Rs.1,00,000 and thus plan to lawfully avoid your tax sorrow.  This is so, because Section 80C of the Income-tax Act does not require you to invest out of your ‘income chargeable to tax’.  This point can be better appreciated by the illustration hereunder:

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IT’S TIME FOR YOUR TAX RETURNS!

You need to know atleast this much on mandatory E-filing & filing returns even where no tax is payable!

              Starting from Companies in Assessment Year 2006-07 and Partnership Firms liable to tax audit under Section 44AB in Assessment Year 2007-08, Proprietorships of Individuals and HUFs liable to tax audit from Assessment Year 2010-11, have all been mandatorily required to file their income-tax returns electronically.

MANDATORY E-FILING FROM AY 2012-13

              With effect from Assessment Year 2012-13, mandatory filing of E-returns has been extended for all Individuals and HUF taxpayers having taxable income of Rs.10 lakhs or more.

               Moreover, a resident Individual or HUF (other than not ordinarily resident in India) shall be required to file E-return, if such Individual or HUF has assets (including financial interest in any entity) located outside India or has signing authority in any account located outside India. This obligation for mandatory e-filing of the Income-tax Return will be required to be discharged, even where the taxpayer having such assets outside India does not have any taxable income in India. It needs to be noted that for this purpose, Non-Residents or Residents but Not Ordinarily Residents, within the meaning of Section 6 of the Income-tax Act, will not be required to declare any of their overseas assets in their Indian Tax Returns. (more…)

GET SET TO FILE RETURN THOUGH NO TAX PAYABLE!

If Your Gross Total Income Exceeds The Taxable Limit You Are Under Obligation To File Your Income-tax Return!

                       Section 139 of the Income-tax Act provides that an Individual or a Hindu Undivided Family is required to file his income-tax return, if his Gross Total Income (GTI) prior to various deductions under Section 80 family (such as 80C, 80D, 80G etc.) exceeds the basic income-tax exemption limit. From Assessment Year 2012-13, the prescribed exemption limit is Rs.1,80,000 (Rs.1,90,000 in case of a female, Rs.2,50,000 for individuals aged 60 years and above but below 80 years and Rs.5,00,000 in case of individuals aged 80 years and above).

                 GTI includes within its scope the total of all taxable incomes, after considering the relevant deductions available under the five heads of income, but before allowing the eligible deductions under Section 80 family for purpose of computing the Total Income. The case studies below will meaningfully illustrate this point. (more…)

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