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Income Tax FAQs II - Payment & Filing Tax Return Research Team | Posted On Thursday, January 15,2009, 05:18 PM

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Income Tax FAQs II - Payment & Filing Tax Return



1.How and where can I pay income tax?

Tax can be paid by way of cash, cheque or draft in any authorised national banks, in the prescribed challan. The challan can be obtained from Income tax Offices.

2.What do you mean by Income Tax Return filing?

Income Tax Return is a statutory return to be filed by assessee with Income Tax Department stating the total income earned & tax paid/payable by him during the previous financial year.

3.Is it compulsory to file a return on income when there is loss?

If a person has sustained a loss in the previous year and wishes to carry forward the loss to the subsequent year he should furnish a return of loss in the prescribed form before the due date.

4.Do I have to pay tax on all the money earned?

No, if you are an individual or HUF, you do not have to pay tax till you reach a specified exemption limit; once you cross that limit tax have to be paid as per following rates, slab wise:

5.Do I have to file a return even if my income is lower than the exemption limit? What is 1/7 criterion?

If you are Individual or HUF, then Yes, if you fulfils any one of the following conditions at any time during the previous year :

  • Ownership/lease of a motor vehicle.
  • Occupation of any category or categories of immovable property as may be specified by the board by notification whether by way of ownership or tenancy or otherwise.
  • Incurred expenditure on himself or any other person on travel to a foreign country other than Bangladesh, Bhutan, Maldives, Nepal, Pakistan or Sri Lanka (not being a travel to Saudi Arabia for Hajj or travel to China on pilgrimage to Kailash Mansarovar).
  • Subscription of a cellular telephone (not being a wireless in local loop telephone).
  • Holder of a credit card (not being an add-on card or not being a Kisan credit card, issued by a bank or an institution).
  • Member of a club where entrance fees charged is Rs 25,000 or more.
  • Expenditure of Rs 50,000 or more during the previous year towards consumption of electricity.

However, the government has specified that the above provision is not applicable in the case of a Non-Resident Indian (NRI).

Also if you are at least 65 years of old and not engaged in any business /profession, then you may not file return even when you fulfill conditions 2 or 4 above.

See Also: How To Calculate Income Tax For Salaried Person?

6.There are various returns available on Income Tax Departments site, which one do I need to file?

Class of Assessees



Individuals, HUF, Firms etc. (except companies and charitable assessees)

All cases

One by Seven scheme

Business or Profession income

Non- business income

Non- business income, No Capital Gain, No agriculture income

Non business income and total income less than Rs 2 lakhs

Form No. 2D or Saral form

Form No. 2C

Form No. 2

Form No.3 or 3D

3 or 2D or 2E (Naya Saral)

Form No. 2A

Charitable assesses

All cases

Form No 3A

Company except charitable assesses

All cases

Form No 1

Search cases

All cases

Form No 2B

7.What are the due dates for filing returns for various assesses?


Due date

For four categories namely :
A. Companies
B. All auditable cases
C. Working partner of auditable firms,
D. Persons covered other than 1/7 scheme,

31st October

In any other case

31st Jul

8.What is E-filing of return?

The Electronic Filing of Income Tax Returns was introduced in 2004. Under this scheme, eligible assessees can file their returns of income electronically through authorised persons to act as e-return intermediaries on or before the due date.

The intermediaries digitalise the data of such returns and transmit the same electronically to the e-filing server of Income Tax Department under their digital signatures.

See Also: How To Calculate Your Taxable Income?

9.Who are eligible to file e-return?

Any assessee except an Association of persons or Body of Individual, who has been allotted a permanent account number (PAN) and who is assessed or is assessable to tax in any of the selected cities, which are presently on Income Tax network is eligible to file his return of income under this scheme.

See Also: Income Tax Return Filing And Eligibility

10.What do you mean by 'belated return'?

If the return is not furnished within the time prescribed or within the time permitted under a notice issued, the person can furnish the return of any previous year at any time before the end of one year from the end of the relevant assessment year, or before the completion of the assessment year.

11.What are the consequences of filing belated return?

A penalty of up to Rs 5,000 is required to be paid if the tax man picks up your paper for assessment. In addition, a penal interest @ 1% per month would be charged for default in tax payments.

12.What is the penalty?

When speaking of belated filing of returns, the tax payer is ought to be in either of the following two situations.

a) He or she has paid all his taxes but failed to file the returns on the due date for genuine reasons.
b) He or she has not only failed to file the returns but also failed to pay his taxes on the due date

In the first case, since the assessee has cleared all his dues to the government, no penalty or interest shall be charged; provided the returns is filed by the end of the assessment year.

However, if the assessee belongs to the second category of people, who have failed to deposit the tax dues with the government before the due date, interest @ 1% per month or part of the month (simple interest) shall be levied on the amount of net tax due from him under section 234A of the Income-Tax Act from the date immediately following the due date till the date of filing of returns.

13.What is Advance Tax?

Advance tax means the advance tax payable in accordance with the provisions of Chapter XVII-C. Tax shall be payable in advance during any financial year in respect of the total income of the assessee which would be chargeable to tax.

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