Taxing Times!!!

It is the time of the year, everyone is busy in preparing to file the income tax return. It is important to understand the basics for filing the income tax return.

A. What is the difference between Previous Year and Assessment Year?

Income of a financial year is to be reported always in the immediately subsequent financial year as per Income tax Act. Means income of Financial Year 2017-18 is reported in Financial Year 2018-19.

From the income tax department perspective, the financial year in which it is reported is the year in which it is taken up for assessment. Hence financial year 2017-18 is termed as previous year and Financial year 2018-19 is considered as Assessment year.

B. Who has to file the income tax return?

As per the Income tax act, any person whose total income exceeding the basic exemption limit has to file the income tax return.

Total income here means – Aggregate of income earned or received from various heads of income such as Income from Salary, Income from House Property, Income from Other sources, Income from capital gains but before claiming any deduction like Life Insurance premium, children education expenses, Repayment of Principal component of EMI towards housing loan.

Ex. Mr Sinha is a salaried employee having interest from FD and is also the owner of House which he is given on rent. He has PF, Housing loan repayment and Insurance Premium to claim as deduction for availing tax benefit.

PF contribution or Insurance premium paid or Principal amount repayment towards housing loan will not be considered only for determining the total income.

This is given only for the purpose of determining whether an assessee has to file the income tax return or not.

For total income calculation for Mr Sinha,

Salary Income

Gross Salary minus HRA, Conveyance, Medical etc.

Rental Income minus Property tax paid, interest on Housing loan XXXX
FD Interest XXXX
Total Income XXXX


If the total income before deductions is


Total Income > Basic Exemption Limit File the income tax return
Total Income < Basic Exemption Limit Not required to file the income tax return


C. What is the basic exemption limit?

Assessee’s age less than 60 years. Rs. 250,000
Assessee’s age 60 years or more but than 80 years of age Rs. 300,000
Assessee’s age 80 years or more Rs. 500,000


D. What is the due date for filing the Income tax return?

Assessee’s whose accounts are to be audited 30th September
Transfer Pricing Assessee 30th November
Others 31st July


E. Can I file the income tax return even after the due date?

Yes. The income tax return can be filed even after the due date but not later than 31st March 2019 for FY 2017-18.

But the income tax provision says that persons filing income tax return has to pay,

After the due date but on or before 31st December 2018 Rs. 5,000/-
After 31st December 2018 but on or before 31st March 2019 Rs. 10,000/-


The fee for the belated filing of income tax return is implemented from income tax return filed for FY 2017-18 onwards.

F. Can we still file the return even if income is below the taxable limit?

It is encouraged to file the income tax return even if it is below the taxable limit because any assessee when he approaches the bank for loan, last 3 years income tax returns are asked. Further nothing wrong in filing the income tax return and be clean.

G. In general what are all the details/ documents one should keep it handy for filing the income tax return?

a. Permanent Account number.
b. Aadhar number.
c. Income tax portal password.
d. Form 16 if a salaried employee.
e. Property tax paid receipt.
f. Final (not Provisional) Interest certificate if housing loan is availed.
g. Interest income from FD, RD, Savings Bank, Bond funds.
h. Dividend Income from companies, Mutual funds.
i. Classification of Mutual funds as equity-based or debt based.
j. Details of purchase and sale of property, securities.

It is not advisable to wait till the last minute to organise things for filing the income tax return. It is better to prepare and ensure that the return is filed correctly without missing on any information. It is better to file the return within time and not wait till the last day.

H. Should I have to file the return even if all the tax is deducted at source (TDS) by the employer?
The clarification will be provided in the next edition.

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About the Author: Prakash Anantharaman

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