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Frequently Asked Questions >> General |
| General |
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| Income
Tax Clearance Certificate abolished w.e.f. 1-1-03 |
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Q1. What is Assessment year and financial
year?
Ans : Financial year starts from
1st April and ends on 31st March (wherein there is income
pertaining to the whole year or part of the year). Assessment
year is the year immediately following the financial year
wherein the income of the F.Y. is assessed.
Q2. How and where income tax has to be
paid?
Ans : 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.
Q3. Who is liable to pay Income-tax?
Ans : Every 'person' who has taxble
income during the previous year shall be liable to pay
income tax. 'Person' is defined in the Income-tax Act
to include
(i) an individual,
(ii) a Hindu undivided family,
(iii) a company,
(iv) a firm,
(v) an association of persons or a body of individuals,
whether incorporated or not,
(vi) a local authority
(vii) every artificial juridical person, not falling within
any of the preceding items.
Q4. What is Permanent Account Number (PAN)?
Is it compulsory to obtain and quote PAN?
Ans : Permanent Account Number
is a ten character unique number allotted to a person
by the Income tax Department. It is compulsory for the
following persons to apply for the allotment of PAN if
he has not already been allotted one :
(i) Every person who has taxable income during any previous
year (financial year).
(ii) Every person carrying on any business or profession
whose total sales, turnover or gross receipts are or is
likely to exceed Rs.5 lakhs in any previous year.
It is compulsory to quote PAN in all returns of income
and every correspondence with Income-tax authorities and
in all challans used for the payment of tax. As per recent
notification issued by Director General of Foreign Trade
and Central Excise Department, PAN is required to be quoted
by all holders of Import/Export Code (IEC) and all Central
Excise assessees. PAN is also to be quoted in all documents
pertaining to the below mentioned transactions :-
(a) Sale or purchase of any immovable property valued
at Rs.5 lakhs or more;
(b) sale or purchase of a motor vehicle which requires
registration by a Registering Authority other than 2 wheelers;
(c) a time deposit exceeding Rs.50,000 with a banking
company;
(d) a deposit exceeding Rs.50,000 in any account with
Post Office Savings Bank;
(e) a contract of a value exceeding Rs.10 lakh for sale
or purchase of securities;
(f) opening an account with a banking company;
(g) making an application for a telephone connection including
a cellular telephone connection;
(h) payment to hotels and restaurants against their bills
for an amount exceeding Rs.25,000 at any one time.
(i) Payment in cash for purchase of bank drafts or pay
orders or bankers cheques from a banking company to which
the Banking Regulation Act, 1949(10 of 1949), applies
(including any bank or banking institution referred to
in section 51 of the Act) for an amount aggregating fifty
thousand rupees or more during any one day.
(j) Deposit in cash aggregating fifty thousand rupees
or more, with a banking company to which the Banking regulation
Act, 1949(10 of 1949), applies (including any bank or
banking institution referred to in section 51 of that
Act) during any one day.
(k) Payment in cash in connection with travel to any foreign
country of an amount exceeding twenty five thousand rupees
at any one time.
Explanation - for the purposes of this clause,-
(a) "payment
in cash in connection with travel" includes payment
in cash towards fare, or to a travel agent or a tour operator,
or for the purchase of foreign currency;
(b) the expression "travel to any foreign country"
does not include travel to the neighbouring countries
or to such places of pilgrimage as may be specified by
the Board under Explanation 3 of sub-section (1) of section
139
Q5. Tax has already been paid
(by way of tax deducted at source or advance tax) on the
total income and there is also no interest payable or
refund due. In such a case, is it necessary to file a
return of income?
Ans : Yes, every person whose total
income during the previous year exceeded the maximum amount
which is not chargeable to Income-tax should file his
return of income in the prescribed form irrespective of
whether any tax or interest is payable or refund is due.
On his failure to furnish a return before the end of the
relevant assessment year, he shall be liable to pay a
penalty of Rs.5000/-.
Every person who is liable to furnish a return of his
income in form No.2C as per the 'One-by-Six Scheme' should
also furnish the same before the due date ( details of
the 'One-by-Six Scheme' are
available in the separate page of this site). On his failure
to do so he shall be liable to pay a penalty of Rs.5000/-
Q6. Is it compulsory to file a return
of income when there is loss?
Ans : 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.
Q7. What are the due dates for filing
of returns of income/loss?
Ans : The due dates shall be as
under :-
(a) Where the assessee is a company, the 31th day of October
of the assessment year;
(b) Where the assessee is a person other than a company.
(c) if the accounts are required to be audited, the 31st
day of October of the assessment year;
(d) where the total income includes any income from business
or profession and where the accounts are not required
to be audited, the 31st day of July of the assessment
year;
(e) in any other case the 31th day of July of the assessment
year.
Q8. Can a return of income be filed after
the due date?
Ans : Yes, a person who has not
furnished a return before the due date may furnish the
same at any time before the expiry of one year from the
end of the relevant assessment year or before the completion
of the assessment whichever is earlier.
Q9. Where should the return of income
be filed?
Ans : The return of income should
be file with the Assessing Officer having jurisdiction
over the person. The jurisdiction of officers in Karnataka
& Goa Region is available in the jurisdiction(link) menu
of the site.
Q10. Who is an Assessing Officer (A.O.)?
Ans : An Assessing Officer is a
Joint Commissioner or Joint Director or Deputy Commissioner
or Assistant Commissioner or Deputy Director or Assistant
Director or Income-tax Officer who has the relevant jurisdiction.
Q11. Are the incomes of all members of
the family to be clubbed together for charging to Income-tax?
Ans : No, each member of the family
will be charged separately on his or her income. There
are, however, certain exceptions as stated in Section
64 of the Income-tax Act. Some of these are mentioned
below :-
(i) The income arising to the spouse of an individual
directly or indirectly from assets transferred directly
or indirectly to the spouse by such an individual otherwise
than for adequate consideration or in connection with
an agreement to live apart shall be included in the income
of the individual.
(ii) All incomes of a minor child in excess of Rs.1500
(other than income accruing to him on account of any manual
work done by him or from any activity involving application
of his skill, talent or specialised knowledge and experience)
shall be included in the income of that parent of the
minor child whose total income excluding the minor's income
is greater.
The income of Hindu Undivided Family (HUF) is taxed separately
in the hands of the HUF and income received by the members
from out of the income of the HUF will not be charged
to tax in their hands.
Q12. Is it compulsory to maintain books
of accounts?
Ans : Every person carrying on
legal, medical, engineering or architectural profession
or the profession of accountancy or technical consultancy
or interior decoration or any other profession as notified
by the Central Board of Direct Taxes shall keep and maintain
books of accounts. Also, every person carrying on business
or profession (other than professions mentioned earlier)
shall maintain books of accounts if the income from business
or profession exceeds Rs.1,20,000/- or the total sales,
turnover or gross receipts in the business or profession
exceeds Rs.10 lakhs in any one of the three years immediately
preceding the previous year.
Q13. Is it compulsory to get the books
audited?
Ans : (i) Every person carrying
on business shall get his accounts audited if the total
sales, turnover or gross receipts in business exceed Rs.40
lakhs in the previous year.
(ii) Every person carrying on profession shall get his
accounts audited if his gross receipts exceed Rs.10 lakhs
in the previous year.
Q14. If I have some information on evasion
of tax , to whom should I give this information?
Ans : This information should only
be given to the Addl.DIT (INV) and such
information will be kept confidentional. |
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