For all your financial transactions you have to quote the PAN number. If you do not submit your PAN and make an investment the income you get from the investment will be subject to a higher TDS of 20% instead of the usual 10%.
If you fill the PAN number incorrectly you will have to pay a penalty of INR 10,000.The tax refunds you get will go to some other account instead of your account which is bad for you.
All high value transactions you make with financial services firms and merchant establishments are reported to the CBDT (Central Board of Direct Taxes).
The income tax department gets all the information of your high value transactions from your PAN card details (PAN number).
The Computer Aided Scrutiny Selection (CASS) matches the information of your high value transactions (spending/investments) with the returns you have filed, and any mismatch results in you getting an income tax notice.
You can file your income tax returns till the end of the assessment year if you have no tax dues pending. (You have paid all your taxes).
The tax returns for the FY (Financial Year) 2013-14 , the year you have earned your income, can be filed before 31st March 2015 (Assessment year 2014-15) without any penalty if you have paid your taxes.
If you have taxes unpaid and you file your returns after the deadline (31st March 2015) then you have to pay a penalty of INR 5000.
You cannot file a revised return or carry forward any losses you suffer (say capital losses) if you file your taxes after the due date.
If your gross taxable salary (Salary available to tax) before availing of the deductions under any Section is above INR 2.5 Lakhs then it is compulsory for you to file income tax returns.
If you don’t file your returns you have to pay a penalty up to 300% of the outstanding tax.
The income tax department has an integrated tax system and any income from your previous job is instantly detected.
If your previous employer has deducted your TDS these details would appear in the Form 26 AS. You have not filed returns for this income and If such an evasion is detected you have to pay a tax penalty up to 300%.
If your interest income (say the interest income you get on your fixed deposit) exceeds INR 10000 in a year the bank deducts TDS of 10.3%.
You can avoid paying this TDS if your income is below the basic taxable limit by filling Form 15 G and Form 15H (If you are a senior citizen).If you submit a wrong declaration then you have to pay a penalty of INR 10000.
If you split your deposits across various banks and their branches to avoid TDS the income tax department can link these accounts to you through your PAN details.
The interest you earn on bonds, fixed deposits, recurring deposits and savings accounts is taxable and you have to mention it in your tax returns. The interest you earn up to INR 10000 on your savings bank account is tax free (Section 80 TTA) but needs to be included in your total income. The PPF interest income is tax free but needs to be included in the exempt income.
If you don’t comply with the tax notice you have to pay a penalty of INR 10000.This is apart from the tax and the interest penalty.
Assessment year is the year of paying tax on the salary/income you have earned in the previous year called financial year.
You have to file your returns (pay your taxes) in the year between 1st April 2014 to 31st March 2015 (Assessment Year) for the salary/income you have earned in the previous year 1st April 2013 to 31st March 2014 (Financial Year).
What is Form 26 AS?
You can access your details from the Form 26 AS only after entering your PAN number.
You get details of :
Tax deducted at source
Self assessment tax
All high value transactions made as per income tax rules.
The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.