Ashwani Jain is feeling as if a load has been lifted off his shoulders. The announcement last month that salaried taxpayers with a taxable income of up to Rs 5 lakh need not file their tax return has come as a relief for this Ghaziabad-based engineering lecturer.
"I don't need to file my tax return this year," he says. Jain's salary is roughly Rs 3.6 lakh a year, well below the Rs 5 lakh cut-off set by the Central Board of Direct Taxes (CBDT) in its 24 June notification.
Like scores of other taxpayers across the country, Jain is making a mistake. He has not taken into account his other sources of income, including the interest earned on fixed deposits and NSCs.
If he has an income from these or any other source, it's mandatory for him to file his tax return. Besides, the 3.5% earned on the balance in his savings bank account should be mentioned in his Form 16 and the tax on it should have been paid.
There could be a Rs 5,000 penalty waiting for him if he doesn't file his tax return.
Though Jain's confusion stems from the recent CBDT notification, many other taxpayers are blissfully unaware of their obligation to file their returns. "A lot of people are under the impression that if their tax has been deducted at source (TDS), they don't need to file returns," says chartered accountant Mukesh Goel.
Others tend to under-report their income. Delhi-based Pratibha Verma works in a PSU bank, but believes that the interest earned on her savings bank account is tax-free. Turn to page 20 to find out what constitutes income and who is required to file returns.
How a taxpayer files his return and the channel he chooses depend largely on a person's knowledge of taxation and the money he is willing to spend. Here's a look at the different ways in which you can file your return and the costs involved
No comments:
Post a Comment