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Tax Payer

A Taxpayer is a Person that pays Tax. Taxpayers have an Permanent Account Number, issued by MOF, Government of India.

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Tax Consultants

We are Specially Trained Income Tax Return Preparer by the Income Tax Department, Government Of India, Ministry of Finance

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Learning Centres

We offer variety of courses of Income Tax Planning and Return Preparation. Tax planning is one of the main objective of the institute.

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General Knowledge of Income Tax

Question 1) Is it mandatory for All Indian Citizens to file a Income Tax Return?

Answer :: Filing of Income Tax returns is a legal obligation of every person whose total income for the previous year has exceeded the maximum amount that is not chargeable to income tax under the provisions of the I.T Act, 1961.

Question 2) What can happen if any one does not File the Income Tax Return ?

Answer :: The Result can be Severe and the TAX Payer could be in Jail upto 7 years plus Fine.Non-payment of tax attracts interests, penalty and prosecution. The prosecution can lead to rigorous imprisonment from 6 months to 7 years and fine.Click here to Read details...

Question 3) What is Filing / e-filing of Income Tax ?

Answer :: In simple terms you can furnish or dicslose your income to the Income Tax Department manually in any Income Tax office or through Internet at your convenience.

Question 4) What are the minimum requirements to File a Income Tax ?

Answer :: Only a PAN - Permanent Account Number is necessary to File / e-File your Income TAX Return.

Question 5) I don't understand the process of e-filing. What should I do?

Answer :: Are you Specialized in Filing the Income TAX Return. Do you know all basic rules of Income Tax Act 1961? If it is "No", Simply let us do the JOB for you. Why worry about it... Click here to e-File. You can call us for any discussion over phone, through Skype or call us for Home Visit. Don't bother we are there to help you out.

Question 6) What are the benefits of filing my return of income?

Answer :: 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.

Question 7) Is it necessary to file return of income when I do not have any positive income or No Income or Loss ?.

Answer :: If you have sustained a loss in the financial year, which you propose to carry forward to the subsequent year for adjustment against its positive income, you must make a claim of loss by filing your return before the due date. Even if you do not have any Income you are supposed to File a Return of Tax. e-Filing of Tax Return does not mean Paying of Tax....

Question 8) So far I have never paid any tax. If I file a return this year will the IT department ask me about my earlier years income?

Answer :: It is never too late to start honoring your constitutional obligations for payment of tax. The department may ask you to file return of income for earlier years if it finds that you had taxable income in those years.

Question 9) Why is return filing mandatory even though all my taxes and interests have been paid and there is no refund due to me?

Answer :: Amounts paid as advance tax and withheld in the form of TDS or collected in the form of TCS will take the character of your tax due only on completion of self-assessment of your income. This self-assessment is intimated to the department by way of filing of return. Only then does the government acquire rights over the prepaid taxes as its own revenue. Filing of return is critical for this process and, hence, has been made mandatory. Failure will attract levy of penalty.

Question 10) What does the Income Tax Department consider as income?

Answer ::The word Income has a very broad and inclusive meaning. In case of a salaried person, all that is received from an employer in cash, kind or as a facility is considered as income. For a businessman, his net profits will constitute income. Income may also flow from investments in the form of Interest, Dividend, and Commission etc. Infect the Income Tax Act does not differentiate between legal and illegal income for purpose of taxation. Under the Act, all incomes earned by persons are classified into 5 different heads, such as:

    1. Income from Salary
    2. Income from House property
    3. Income from Business or Profession
    4. Income from capital gains
    5. Income from other sources

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NRI Taxation

There is a misconception among the majority of the NRI's that they do not have to submit the Income Tax Return. Paying Income Tax and Submitting (filing) Income Tax Return are two different aspects. Non Submission of Income Tax return may lead to "Show Cause NOTICE " followed by Penal action along with interest. Cash Flow of any NRI are highly monitored by Financial Intelligence Unit (FIU), Ministry of Finance, Govt of India.

Question 1) Who is considered as a NRI ?

Answer :: An Indian Citizen who stays abroad for employment/ carrying on business or vacation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. ( persons posted in U.N. organisations and officials deputed abroad by Central/ State Government and Public Sector Undertakings on temporary assignments are also treated as non-resident) Non-resident foreign citizens of Indian Origin are treated on par with non-resident indian citizens.

Question 2) I am going out of India. Who will file my income tax return for this period?

Answer :: You can authorize any person by way of a Power of Attorney to file your return. A copy of the Power of Attorney should be enclosed with the return.

Question 3) What is the Tax Liability of a Non-Resident.

Answer :: Liability to pay tax in India does not depend on the nationality or domicile of the Tax payer but on his residential status. Residential Status is determined on the basis of physical presence i.e. the number of days of stay in India in any year.
An individual is resident if any of the following conditions are satisfied:
(i) he stayed in India for 182 days or more during the previous year, or (ii) he stayed in India for 365 days or more during the four preceding years and stays in India for atleast 60 days 9 182 days in case of an Indian citizen or a person of Indian Origin coming on a visit to India or 182 days in case of an Indian citizen going abroad for an employment ) during the previous year. Stay in India for the above criteria may be continuous or intermittent.
Hindu Undivided Family (HUF) or firm or other Association of persons is resident of India except in cases where the control and management of its affairs is wholly situated outside India in the previous year

Question 4) Should NRI File a Income Tax Return in India.

Answer :: If you are a NRI, you need to file Income Tax Return in India for any kind of Income gererated or arise or accrue in India whether it is small or any amount. For example Bank interest , Profit Loss from Shares and Mutual Funds, Bonds , Rental Income or any Capital Gains from sale of Property.

Question 5) How can NRI save Tax on Income generated in India?

Answer :: By Investing in any eligible investments under 80C
By Taking Health Insurance Policies
By investing in Capital Gain Bonds

Question 6) What is the Basic Exemption Limit for NRI

Answer :: Resident senior citizens (above 60 years) and super senior citizens (above 80 years) have a basic tax exemption of Rs 2.5 lakh and Rs 5 lakh, respectively. However, for senior citizens and super senior NRIs, this limit is much lower at Rs 2 lakh only.
Besides, NRIs cannot adjust the taxable capital gains against the basic exemption limit. If an NRI earns Rs 2 lakh capital gains and no other income, the full amount is taxed at the applicable rate. Unlike a resident Indian, he cannot adjust this income against the basic exemption limit of Rs 2 lakh.

Question 7) What are the areas where NRI's are not eligible for deductions ?

Answer :: A- Equity investments :
The government's stated intention is to attract investments from NRIs, but they have been denied the benefit of investing in the Rajiv Gandhi Equity Saving Scheme. The newly introduced deduction under Section 80CCG for first-time investors in equity can be availed of only by resident Indians.

B- Disability :
NRIs don't get any tax benefit if they suffer from a disability. Under Section 80U, a resident Indian can claim deduction of up to Rs 50,000 if he suffers from a disability. The deduction is Rs 1 lakh if the disability is severe. They are also not eligible for the deduction if they have a disabled dependant. Under Section 80DD, resident taxpayers can claim a deduction of Rs 50,000 for the treatment of a disabled dependant. Again, the deduction is higher at Rs 1 lakh in case of severe disability. However, these benefits are not extended to NRI taxpayers.

C- Medical treatment :
The discrimination extends to medical treatment as well. Under Section 80DDB, resident taxpayers can claim a deduction of up to Rs 40,000 for the treatment of dependants with specified diseases. The deduction is higher at Rs 60,000 in case of senior citizens. However, NRIs are again not eligible for this tax benefit. They may be paying for the treatment of their dependants, but won't get any tax deduction.

D- Problems of TDS
NRIs are also subjected to a higher TDS (tax deducted at source) rate and have fewer options to avoid it.

E- Property deals
This year's budget has changed the TDS laws relating to property transactions. When a resident Indian purchases a property valued at over Rs 50 lakh, he has to deduct 1% TDS and deposit it with the government. However, if the property belongs to an NRI, the TDS is 20% even if the property is worth less than Rs 50 lakh. This makes it doubly difficult for NRIs to sell real estate.

F- Bank interest
Resident Indians can avoid the TDS on bank interest by submitting the Form 15G or 15H. However, NRIs are not permitted to submit Form 15G for their NRO deposits in banks, and TDS is mandatory. The problem doesn't end here. The TDS rate for NRO deposits is 30.9% compared with 10.3% for fixed deposits for resident Indians. The TDS is applicable for a resident Indian if the interest exceeds Rs 10,000 in a year per bank branch. However, this threshold limit does not apply to NRO deposits. Even Rs 1,000 is subjected to TDS at the rate of 30.9%. The interest earned on all other investments, such as corporate deposits and bonds, is subject to a 20.6% TDS, whereas the rate for resident Indians is only 10.3%

G- Capital gains
No TDS is applicable on shortterm or long-term capital gains earned by resident Indians when they sell mutual funds or stocks. However, for NRIs, there is a 15% TDS (plus 3% cess) on short-term capital gains from shares and mutual funds if the securities transaction tax (STT) has been paid. If no STT has been paid, the TDS rate is higher at 30.9%. They are even subjected to a 10% TDS on long-term gains from shares and mutual funds.
G-Rental and other income While resident Indians are liable to pay TDS at the rate of 10% on rental income obtained from land and buildings, this rate is higher at 30%, along with a cess of 3%, for the nonresident Indians. All other taxable incomes of an NRI are also subject to a 30% TDS, besides the cess.

H- Concessions
If an NRI opts for the concessional tax treatment, he is taxed at a flat rate. However, in such a case, he cannot avail of any deduction of expenditure or allowance under any provisions or claim benefit of cost indexation for capital gains.

I- Investments
Apart from the higher taxes, NRIs are not allowed to invest in certain instruments, such as the Public Provident Fund. Certain scrips specified by the RBI are also out of their reach. NRIs constitute an important segment of the investing population. If the government wants this section to bring in more investment, it should take steps to remove these glaring anamolies in the tax structure. This is especially important in the current situation, when the rupee has seen a drastic fall against the dollar. If NRIs are given the same tax treatment that resident Indians enjoy, it will encourage this large segment of overseas population to start investing in their home country.

Question 8)What are the changes that has implemented from this current year ?

Answer :: Change 1 : Mandatory efile if taxable income over Rs 5 lakh
Until last year, that is, for tax returns until financial year 2011-2012, it was mandatory to efile returns where the taxable income was over Rs 10 lakh. This year, the limit has been further reduced. If you had taxable income in India that exceeded Rs 5 lakh in 2012-13, you must efile your tax returns. You can either do it yourself using online efiling portals or take the help of assisted tax preparers. The income tax department provides a free method to upload your tax return online. If you are looking for a more user friendly approach, paid efiling portals might be a good choice. Many of these paid service providers do offer special packages for NRIs. If you are not comfortable doing the entire filing by yourself, you can choose to go to assisted preparers. You can get professional advice along with help with efiling your tax return.

Change 2 :Match your tax credits
From this year, the Income Tax department has introduced a system by way of which you can match your income tax credits with your actual tax return. The tax credit statement is available in the form of Form 26AS. "This statement provides details of all taxes deducted on your behalf or paid by you during the year. What you file in your tax return must match exactly with the details on Form 26AS. If there is a mismatch, you will get a show cause notice from the Income Tax department seeking clarification," Explains the TRP. He adds, "There can be two reasons why there is a mismatch. First, on the part of the tax deductor. He may have misquoted the PAN number or may have made a delayed deposit of the tax deducted. In such case, you would need to contact the tax deductor and ask him to rectify the error. The other reason could be that you have entered incorrect details while filing your tax return. You can easily rectify this error by matching it with your Form 26AS."

Question 9) What is Form 26AS?.

Answer ::
-Details of tax deducted on behalf of the taxpayer by deductors 
-Details of tax collected on behalf of the taxpayer by collectors 
-Advance tax/self assessment tax/regular assessment tax, etc. deposited by the taxpayers 
-Details of paid refund received during the financial year 
-Details of the high value transactions in respect of shares, mutual fund etc. This statement is generated through a valid Permanent Account Number (PAN). For NRIs, important income sources that would be reflected in Form 26AS include interest on NRO bank deposits and other bonds, capital gains on sale of securities on an Indian stock exchange, tax deducted, if any on rental income or sale of property etc.

Question 10) What would be the Consequences for not Filing Income TAX return by NRI ?.

Answer ::
If an NRI fails to file its income tax return on time, they can still file their return with the following consequences –

  • If you do not have any tax payable (that is all your tax has been deducted at source), you can still file your tax return by 31st March 2015 without any penalties
  • If you do have tax payable, you can still file your returns by 31st March 2014 but you will be charged an interest of 1% per month for every month of delay starting from 31st July 2011 till the time you file your tax returns
  • If you do not file your tax returns even by the 31st of March 2014, you may be charged a penalty of Rs 5,000 after 31st March 2014.

Thus, non filing of income tax returns will result in interest and penalty. In case there are any losses to be carried forward, the returns need to be filed. Without filing the returns, the losses cannot be carried forward for set-off against subsequent years’ incomes.

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